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DEFINITION of 'Warrant Coverage'. An agreement between a company and its shareholders whereby the company issues warrants equal to some percentage of the dollar amount of the shareholder's investment. Next Up.
The law permits a dealer to add language to the lemon law warranty to exclude coverage for the following: (a) For a failure of a covered part caused by a lack of customary maintenance. (b) For a failure of a covered part caused by collision, abuse, negligence, theft, vandalism, fire or other casualty and damage from the environment (windstorm, lightning, road hazards, etc.).