They are intentionally vague about it because they want you to buy the protection plan, even if you lease. I have tried to read the entire agreement on my four receivers, and I don't recall it ever plainly stating what is covered.
However, I have heard from others that if a leased receiver breaks, it is replaced for $19.95 S&H with no protection plan, and free if you do have the plan. I do not know for sure, but it makes sense that they will replace a leased receiver, in order to keep you paying for programming on that box.
The replacement may be a refurb--That much I know for a fact, because I got one during the warranty period. It works fine and looks great, but has a "Refurbished" sticker on the bottom.
I am paying for the plan because it covers the dish, switches, my 800 feet of cable (some of it buried,) and specifically mentions power surges--something we have a lot of where I live.