(1) "Mechanical breakdown insurance" means an insurance policy, contract, or agreement, as defined in section 10-1-102 (12), C.R.S., that undertakes to perform or provide repair or replacement service, or indemnification for that service, for the operational or structural failure of a motor vehicle due to a defect in materials or skill of work or normal wear and tear, and that is issued by an insurance company authorized to do business in this state.

(2) "Motor vehicle" means any vehicle subject to registration under section 42-1-102 (58) or any powersports vehicle as defined in section 44-20-402 (11).

(3)

(a) "Motor vehicle service contract" or "service contract" means a contract or agreement between a provider and a service contract holder, which contract or agreement is given for consideration over and above the lease or purchase price of a motor vehicle and obligates the provider to perform or provide repair or replacement service, or indemnification for that service, for the operational or structural failure of a motor vehicle due to a defect in materials or skill of work or normal wear and tear. A motor vehicle service contract may provide for any one or more of the following services:

(I) Repairing or replacing tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards;

(II) Removing dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting;

(III) Replacing or repairing a windshield damaged by road hazards;

(IV) Replacing a motor vehicle key or key fob if the key or key fob becomes inoperable or is lost or stolen;

(V) Other services that are similar to the services listed in this paragraph (a).

(b) "Motor vehicle service contract" or "service contract" does not include mechanical breakdown insurance.

(4)

(a) "Motor vehicle service contract provider" or "provider" means a person who, in connection with a motor vehicle service contract:

(I) Incurs the obligations and liabilities to the service contract holder as set forth in the contract; and

(II) Issues, makes, provides, sells, or offers to sell the contract.

(b) A motor vehicle dealer who sells a motor vehicle that is the subject of a motor vehicle service contract is not a "provider" unless the dealer also satisfies both of the conditions set forth in paragraph (a) of this subsection (4).

(5) "Motor vehicle service contract reimbursement insurance policy" or "reimbursement insurance policy" means a policy of insurance providing coverage for all obligations and liabilities incurred by a motor vehicle service contract provider under the terms of a motor vehicle service contract issued by the provider.

(5.5) "Road hazard" means a hazard that is encountered while driving a motor vehicle. "Road hazard" may include potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps.

(6) "Service contract holder" means a person who purchases a motor vehicle service contract.