Coverage Terms

01Coverage Standard

All Laguna Shield™ plans operate as residential service contracts, not insurance products. Coverage is strictly defined as follows:

• Covered: The cost of technician diagnosis, approved labor, and the replacement of individual failed parts or components within a covered system or appliance, up to applicable per-item and annual caps.
• Not Covered: The purchase, installation, or replacement of an entire unit, system, or appliance — regardless of the extent of the failure, the cost of parts vs. full replacement, or any other factor.
• Not Covered: Any failure that does not result from normal mechanical or electrical use (see Section 04 — Exclusions).
• Not Covered: Any item not expressly listed as a Covered Item in the Member's plan tier coverage schedule.

02Coverage Conditions

Coverage applies to a reported failure only when all of the following conditions are simultaneously satisfied at the time the claim is submitted and at the time service is performed:

1. The Member's plan is active and in good standing — no missed or failed payments.
2. The coverage activation date (15 days after enrollment) has elapsed.
3. The failed item is listed as a Covered Item under the Member's current plan tier.
4. The failure is a mechanical or electrical breakdown that occurred after the coverage activation date.
5. The failure resulted from normal residential use — not from misuse, neglect, abuse, or modification.
6. The failed component is physically accessible to the technician without demolition or removal of structural building elements (walls, flooring, ceilings, slabs).
7. The approved repair cost does not exceed the applicable per-item cap or the Member's remaining annual coverage cap.
8. The Member has not previously submitted a fraudulent, misleading, or misrepresented claim for the same item.

Failure to meet any single condition above renders the specific claim ineligible for coverage. The Company's claim adjudicators make coverage determinations based on the technician's diagnostic report and all available account history.

03Per-Item Cap Schedule

The following per-item coverage caps apply in addition to the annual plan cap. When both caps apply to a claim, the lower of the two governs the maximum covered amount.

Per-item caps reset annually with each 12-month membership renewal. A single claim for a single item in a plan year is subject to the per-item cap shown above. Multiple claims for the same item within the same plan year are subject to a cumulative total cap equal to the per-item cap.

04Exclusions

The following are excluded from coverage under all Laguna Shield™ plans. This list is not exhaustive. The Company reserves the right to deny coverage for any failure that does not meet the coverage conditions in Section 02.

• Full unit, system, or appliance replacement — under any circumstances.
• Pre-existing conditions — any defect, malfunction, or deterioration present before the Member's coverage activation date, whether known or unknown to the Member at enrollment.
• Cosmetic damage — dents, scratches, finish damage, discoloration, or any damage that does not impair the mechanical or electrical function of the item.
• Misuse, abuse, neglect, or operator error — including but not limited to: overloading appliances, failing to replace filters, running equipment with known faults, using equipment for unintended purposes.
• Unauthorized repairs or modifications — work performed by unlicensed individuals, or modifications that deviate from manufacturer specifications or local code requirements.
• Damage from external events — fire, flood, storm, lightning strike, power surge, earthquake, act of God, or any event ordinarily covered by homeowners or renter's insurance.
• Pest, rodent, or biological damage — damage caused by insects, rodents, mold, corrosion from biological agents, or infestations.
• Inaccessible or concealed components — parts or systems that cannot be reached by a technician without structural demolition, including pipes or wiring embedded in concrete slabs, walls, or ceilings.
• Code violations and non-compliant installations — systems installed without required permits, by unlicensed contractors, or not to local building code at the time of installation.
• Commercial or multi-unit use — coverage applies to single-family residential properties used primarily as a personal residence.
• Consumables and maintenance items — air filters, water filters, light bulbs, batteries, fuses, belts (unless belt failure caused a secondary covered failure), hoses, and other items replaced during routine maintenance.
• Outdoor and auxiliary systems — pool equipment, spa and hot tub systems, lawn irrigation systems, exterior lighting systems, outdoor kitchens, detached garages, or any structure not attached to the primary dwelling.
• Electronics and smart features — embedded software, firmware, smart displays, WiFi connectivity modules, or app-controlled features — except where specifically listed as a covered smart home system under Elite plans.
• Damage caused by hard water or mineral scale — except for the annual descaling service included under tankless water heater coverage in Premium and Elite plans.
• Secondary or consequential damage — damage to other property, systems, or appliances caused by the failure of a covered item.

05Non-Repairable Items

In the event of a non-repairable determination:

• The Company's liability is limited to the lesser of: (a) the per-item cap, or (b) the actual cost of the repair attempt up to the point of determination.
• The Member is solely responsible for the cost of purchasing and installing a replacement unit.
• The Company may, at its sole and non-obligatory discretion, offer a goodwill cash credit toward the Member's replacement cost. This credit, if offered, will not exceed $250 and does not constitute a coverage obligation or precedent for future claims.
• A non-repairable determination on one item does not affect coverage for other covered items under the same plan.

06Claim Adjudication Standards

All claims are adjudicated by the Company based on the following standards:

• Technician Report: The Company relies primarily on the written diagnosis submitted by the dispatched authorized technician. Members may not substitute their own assessment or a third-party assessment not authorized by the Company.
• Account History Review: The Company reviews the Member's claim history, enrollment date, coverage activation date, and any prior communications as part of every adjudication.
• Coverage Condition Verification: Every claim is checked against all eight conditions in Section 02 before approval is issued.
• Response Time: Coverage determinations are issued within 24 hours of receiving the technician's diagnostic report for standard claims; within 4 hours for Elite plan emergency claims.
• Disputes: If a Member disputes a coverage denial, they may submit a written appeal to [email protected]. Appeals are reviewed within 5 business days by a senior adjudicator. The Company's appeal decision is final except where superseded by applicable state law.

07Coverage Term & Renewal

Coverage under each plan operates on a 12-month term beginning on the coverage activation date (15 days after enrollment). Annual coverage caps reset at the start of each new 12-month term. Unused coverage does not carry forward to the next term.

Plans auto-renew at the conclusion of each 12-month term at the then-current standard monthly rate. Members will receive written notice at least 30 days before renewal if the rate will differ from the current rate. Members may cancel prior to renewal per the Cancellation & Refund Policy in the Terms & Conditions.

Coverage terms may be updated by the Company with 30 days' written notice to active Members. Continued membership after the effective date of updated terms constitutes acceptance.