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Although I am not sure the way my insurance works I think they would fix it and then go after anyone at fault such as the factory. What is the use of having insurance if it won't cover the loss.
At least that is the way they handle my car insurance.
I would also talk to your State's Attorney General's office about it. If you paid for this type of coverage then you should get it.
Bottom line, review the policy coverage with your legal rep. It should have something in there about product defects.
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