Last reviewed: 14 September 2026

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How Texas actually regulates home warranty companies

Texas doesn't use an insurance-code model for home warranties the way California and Florida do. Since 2021, a home warranty company operating in Texas is registered as one category of "service contract provider" under a single, broader chapter of the Occupations Code — and the old law most sites still cite by name doesn't exist anymore.

From the Residential Service Company Act to the Service Contract Regulatory Act

Until 2021, Texas home warranty companies were licensed under a dedicated law, the Residential Service Company Act (Occupations Code Chapter 1303), administered by the Texas Real Estate Commission (TREC). House Bill 1560, passed by the 87th Texas Legislature and signed by Governor Greg Abbott in 2021, repealed Chapter 1303 outright and folded residential service contracts into Chapter 1304 — the Service Contract Regulatory Act — as one product category among several the chapter now governs. Oversight moved from TREC to the Texas Department of Licensing and Regulation (TDLR) effective September 1, 2021, and HB 1560 gave TDLR until June 1, 2022 to adopt its own administrative rules, with the prior TREC-era rules staying in force in the meantime. TDLR's Service Contract Providers (SCP) program has run the category ever since, with its own rule updates along the way — the Texas Commission of Licensing and Regulation adopted amendments to the SCP rules at 16 Texas Administrative Code Chapter 77 in June 2024.

What Chapter 1304 actually covers

The Service Contract Regulatory Act defines a "service contract" broadly: an agreement, paid for separately from the product itself, under which a provider agrees to repair, replace, maintain, or indemnify for the repair of a product due to a defect or normal wear. A home warranty — what the statute calls a "residential service contract" — is one specific type of service contract under that definition, not a separately named product with its own chapter anymore. In practice that means Texas runs home warranties, and a range of other product service contracts, through one registration system at TDLR rather than a warranty-specific insurance license — a structurally different approach from California's or Florida's insurance-code model, even though the underlying goal (making sure a provider can actually pay claims for the life of the contract) is the same.

A carve-out worth knowing: most dealer-sold vehicle service contracts sit outside this chapter

Chapter 1304 exempts a service contract sold by a motor vehicle dealer on a vehicle that dealer itself sold, if the dealer is licensed under Occupations Code Chapter 2301 and backs its obligations with a reimbursement insurance policy. That's why a Texas car dealer's own extended-warranty pitch usually isn't regulated through the same TDLR registration this page describes — it's regulated through the separate dealer-licensing and insurance framework instead. See our guide to reading a vehicle service contract's exclusions for what to check on that side of the industry.

How to actually verify a Texas provider

A company's own claim to be "TDLR-licensed" isn't the check — TDLR's Service Contract Providers program publishes its own registrant records and a public enforcement/sanctions history, the same way it does for every other program it regulates. Checking that record directly, for the specific entity backing the contract (not just the consumer-facing brand name), is the same principle behind point 3 and point 8 of our standard.