Guide to Auto service contracts

7 Vehicle Service Contract Provider (VSCP) VSCs VSCPs are the obligors for most VSCs sold in California. A VSCP is a company that holds a special “VSCP license” from the California Department of Insurance to sell VSCs in California. (For the rest of this Guide, we will refer to the California Department of Insurance as CDI.) The VSCP is the obligor - the company that is legally required to pay the cost to repair your vehicle if it has a covered breakdown. A VSCP must meet many requirements in order to be granted a VSCP license by the CDI. The most important requirement is that a VSCP’s promise to pay for repairs must be guaranteed by a “backup” insurance company. (However, there is an exception to this requirement, which we explain later.) The backup insurance company must be authorized by the CDI to provide the guaranty. If a VSCP goes out of business, or simply decides not to honor a claim, a consumer can have the backup insurance company review the claim. If the claim should be paid, based on the nature of the breakdown and the language of the VSC, then the backup insurance company must pay for the repair if the VSCP does not. The name and address of the backup insurance company must be clearly printed on the VSC. The only VSCPs that do not need to have backup insurance are VSCPs that have at least $100,000,000 (one hundred million dollars) in “net assets,” or are owned by a company that has $100,000,000 in net assets and agrees to guarantee the obligations of the VSCP.