A service contract usually starts covering failures on a set day, and many contracts also exclude anything that was already wrong on that day. Wording varies. Some contracts call this a pre-existing condition clause, others a prior-fault, prior-damage, or known-condition exclusion. The label matters less than the rules underneath it, because those rules decide whether a failure found later is treated as new or as old.

This guide describes general wording. It has not read any seller's contract and makes no claim about what any named contract says. Use it to know what to look for in the paper in front of you.

Why the start line matters

Coverage in most contracts begins on a sale date, an activation date, or the end of a waiting period. A failure that began before that date can be excluded even if it only showed itself afterward. So the clause has three moving parts: the start date, the test for when a fault began, and the proof that decides it. Each can be written differently, and two offers can share a start date and still treat an old fault in opposite ways.

What to ask before you sign

Ask the seller, in writing, which date the prior-fault rule uses. Ask whether it is the date of sale, the date the contract takes effect, or the date the waiting period ends. If the answer is not on the page, the question is still open.

Ask who decides whether a fault existed before the start date. The contract may name the administrator, the repairer, or an inspector. Find out whether the decision rests on the repair record, a diagnosis, or the seller's own paperwork, and whether you can see that record.

Ask whether an inspection is required at or before sale and whether its result is written down. An inspection report is often the only dated record of the unit's condition on the start day. If the contract does not require one, ask whether you may create one yourself and what it has to show.

Ask whether a prior repair counts as a prior fault. Some contracts exclude any part that was ever repaired, others exclude only the same fault, and others say nothing. A repair on a different part may be treated differently from a repair on the same part.

Ask whether a recall or manufacturer campaign is treated as a prior fault. Read whether the contract says the manufacturer's work is covered, excluded, or left to the manufacturer.

Ask whether a fault that started before the start date but produced damage after it is covered, excluded in full, or excluded only for the earlier part. This question separates a clause that looks at cause from one that looks only at the date symptoms appeared.

Compare the clause with its neighbors

A prior-fault rule does not work alone. Set it beside the waiting period, the definition of failure, the inspection rule, and the claim steps. A narrow definition of failure combined with a broad prior-fault exclusion covers less than either clause suggests when read by itself. A clear start date with a short waiting period is easier to check than a long period with vague start language.

Build a one-page grid with a row for the start date, a row for the proof rule, a row for the inspection rule, and a row for how a prior repair is treated. Fill each row from the blank contract, not from the sales conversation. Where a row is empty, write that the paper is silent. Silence is a finding too.

What to keep

Keep a copy of the signed contract, any inspection report, and any repair record for the unit from before the start date. If the contract later decides a claim on the basis of an old fault, those records are what you will need to test the decision. Keep them with the contract rather than with the sales emails.

Where to check the state rules

The rules that govern service contracts differ by state, and the state pages on this site name the regulator and the statute or program for each state. Start with the page for the state where the unit is sold or where the owner lives, such as the Florida page, and check whether that state's rules speak to prior faults before you rely on any general point in this guide. The roster figures on the same pages are where to check registration status and their as-of dates. This guide does not rank providers and does not judge any contract's terms as good or bad.