New Jersey service contract provider bonds.
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New Jersey’s Service Contract Act requires a provider that backs its service contracts with a funded reserve account to keep a surety bond naming the Division of Consumer Affairs. It is at least 5% of the gross consideration received each year, less claims paid, and never less than $25,000. We underwrite it and return a quote, usually within one business day.
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How much does a New Jersey service contract provider bond cost?
It is underwritten: the premium is quoted from the bond amount and your financial picture, so there is no flat price to show.
From reserve account to bond on file.
The Division of Consumer Affairs registration and the bond run side by side. Here is the whole process, start to finish:
Send us your bond amount
Apply online with the bond amount you worked out under the statute — at least 5% of the gross consideration received per year, less claims paid, on all New Jersey service contracts issued and in force, and not less than $25,000 — plus the effective date and your business details. That is the whole form.
A surety specialist quotes it
A specialist reviews the file and returns your premium. The bond issues the moment you pay — no credit review of any kind, not even a soft pull. No obligation until you accept the quote.
Name the Division and keep it in force
Once you accept and pay, the executed bond is issued naming the New Jersey Division of Consumer Affairs as a party, ready to go with your registration file. Keep it in force for as long as you provide service contracts in New Jersey.
What it is and who needs it.
What the service contract provider bond actually does
New Jersey’s Service Contract Act, N.J.S.A. 56:12-87 et seq., governs any contract sold to a consumer for a separate fee to repair, replace or maintain property that fails from a defect or normal wear and tear — extended warranties, home warranties and vehicle service contracts — and it expressly includes motor vehicle ancillary protection products such as tire-and-wheel, paintless dent repair, windshield chip repair, key and key-fob replacement, and lease excess wear-and-use coverage. The provider is the company contractually obligated to the contract holder, and the program is administered by the Division of Consumer Affairs in the Department of Law and Public Safety.
Under N.J.S.A. 56:12-90(a), a provider may sell service contracts in New Jersey only if it assures faithful performance in one of three ways: insure every contract under a reimbursement insurance policy, keep a funded reserve account of at least 40% of gross consideration received less claims paid, or maintain — alone or with a parent or affiliate — a net worth of at least $100,000,000. Subsection (b) then adds the bond for everyone who is not using the insurance route or the net-worth route and is not a Title 17 insurer the Commissioner of Banking and Insurance has found solvent. In practice that means the reserve-account provider, and the bond is owed in addition to the reserve.
The bond was created by P.L.2022, c.91, which took effect on the first day of the twelfth month after its August 5, 2022 approval — August 1, 2023. The same law requires every provider and administrator to register with the Division before providing or administering a service contract, on the Division’s form, with a $300 fee, renewing annually on July 1 or another date the Director sets. Broker pages written before 2023 that say New Jersey requires no bond are out of date.
It is not insurance for you. The bond backs your promises to New Jersey contract holders. If the surety pays on a claim, you repay the surety. What the bond buys you is the right to keep selling on the reserve model without insuring every contract.
You need this bond if you are
Claims, renewal, filing, and what sets the price.
If a claim is made
A claim comes from the party the bond protects, the obligee named on the form, when the duty the bond guarantees is not met.
The surety investigates and pays a valid claim, up to the bond amount. You then repay the surety: a surety bond is a guarantee of your performance, not insurance for you.
Renewal and term
Term and renewal are set in the underwriter's quote.
Keep the bond in force for as long as the obligation behind it runs.
How to file it
Name the Division and keep it in force. Once you accept and pay, the executed bond is issued naming the New Jersey Division of Consumer Affairs as a party, ready to go with your registration file. Keep it in force for as long as you provide service contracts in New Jersey.
What sets the price
This bond is underwritten: the premium is quoted from the bond amount and your financial picture, so there is no flat price to show.
One application, one specialist review.
These are the actual fields: the bond amount you calculated under the statute, the effective date, your entity type and business address, and a contact. A surety specialist reviews it and returns a quote, typically within one business day. Free until your bond is issued.
Start the application →Common questions.
Other New Jersey bonds.
The same bond in nearby states.
Requirements checked on the carrier’s application, . Page updated .
Keep selling on your reserve model.
Send us the bond amount your New Jersey book requires, and a surety specialist quotes the bond — typically within one business day. Free until issued.