Selling Service Contract/Warranty for car repair

[smuggymba]

We're a small car dealership in texas and my boss has asked me to come up with a business plan to sell warranty to customer which will take care of their car repairs in case of an accident.

We plan to charge 100 dollars/month for this service plan. I have some questions/points to make:

1.) Do we need some insurance company to back this warranty or can we back this on our own. We have a repair/body shop and we can fix the car ourselves (the parts will cost)

2.) We don't plan to take responsibility for liability, this warranty plan will cover just the repair of the car.

I'm new to all this and need help from y'all to figure out any legal requirements/implications etc.

Are we legally eligible to sell warranty or do we need some license/bond etc. Is there a price for such policy/bond.

Please help ASAP.

 

[army judge]

You might first want to check with the Texas insurance commissioner. They might consider your service insurance, even though that isn't your intent. I doubt they will object, but inquire with them before you proceed.


Should they have no problem with your idea, they might offer you guidance and/or counsel in how to go forward. I would think that if they clear your idea, you would then require the services of a young, learned attorney to oversee your crafting of the warranty document.


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[smuggymba]

Thanks Army Judge.

How is service insurance different from service contract?

Do we need to back the service contract with some sort of insurance or can we back it ourselves based on the fact that we have a body shop....so if any car is hit, we can fix it on our own (of course the parts will cost us)

Thanks a lot for your time.