When Your Coverage Applies Clause Samples

When Your Coverage Applies. 1. We agree to pay the covered costs to repair or replace the items listed as covered on your Agreement Coverage Summary Page if any such items become inoperable during the term of this Agreement due to mechanical failure caused by routine wear and tear. The definitions of the specific items that may be listed on your Agreement Coverage Summary Page as covered, as well as other limitations on coverage and other terms and conditions, are listed below. 2. We will cover mechanical failures relating to the mechanical parts and components of those domestic-grade items that were in the home and in proper operating condition on the Agreement effective date. 3. We will cover mechanical failures due to rust and corrosion and or sediment. 4. We will cover an unknown pre-existing mechanical failure provided the failure could not have been detected by visual inspection or simple mechanical test. 5. The decision to replace rather than repair items is solely our option. Should we choose to replace an item, the replacement shall: • be the base model that meets all applicable federally mandated minimal manufacturers’ standards, • perform the same primary function, and have a capacity comparable with the covered item, when available with domestically assembled units. When replacing systems and appliances: • We are not liable to provide exact match in color, dye, lot, material, type or brand. • We will be responsible for the installation of the replacement item but not for the cost of the construction, modifications, carpentry or transitional work made necessary in order to accommodate the replacement, nor for any costs to upgrade or modify items for any reason except as otherwise specified in this Agreement. When making repairs: SAMPLE • We reserve the right to rebuild existing parts or components and/or install rebuilt or refurbished parts or components. 6. Our cash payment policies and procedures: • In instances where the combined cost of diagnosis and repair or replacement is estimated to exceed a stated contract dollar limit, we will not provide repair or replacement services but will instead pay an amount equal to the contract dollar limit minus the deductible amount. If the stated contract dollar limit is an aggregate amount then paid claims will also be subtracted from payment. • In some instances, we may offer cash in lieu of repair or replacement services. This offered amount is based on what we would expect to pay (which is substantially less than retail cost) fo...