Wednesday, November 3, 2010

Cease and desist order issued to ShieldStar Home Warranty

Washington state’s insurance commissioner on Tuesday ordered a New Jersey home warranty company to stop selling unauthorized service contracts in Washington.

ShieldStar, doing business as ShieldStar Home Warranty and, has sold at least 21 home warranty service contracts in Washington, according to a cease and desist order posted on Insurance Commissioner Mike Kreidler’s website.

This is the third cease and desist order that Kreidler has issued against a home warranty company in the past several months. (The other cases were unrelated to this one.)

In ShieldStar’s case, the contracts cover parts and labor necessary to fix major appliances and systems in the consumer’s home. But neither the company nor several affiliated individuals named in the report are registered in Washington as a service contract provider.

The company has been ordered to mail a copy of the Kreidler’s cease-and-desist order to all its customers in Washington and to report all premiums charged for Washington policies.

The company has the right to demand a hearing. The order is effective immediately.

Update: (12/8/2010) If you purchased a ShieldStar Home Warranty, we want you to know that the cease and desist order does not prevent the company from fulfilling the terms of your contract. Your current contract with ShieldStar is valid under its usual terms and conditions.

Similarly, the order does not prevent the company from providing a refund when requested by a Washington consumer.

If you have any questions or need any assistance with this or any other insurance-related matter, please feel free to call our consumer protection staff at (800) 562-6900