Basically, what I'm reading it as: If you buy a $2000 TV, with a one year manufacturers warranty that completely covers it from failure with repairs or replacement at no cost to you, then Mastercard, after that first year, will cover the TV for a second year, for failure with repairs or replacement at no cost to you up to $500 per claim. So if the tv completely breaks beyond the possibility of repair after 18 months, they will pay $500 of the cost of a replacement. If a replacement is $650, then you have to cover the $150 difference.
and if you break the TV, by say, throwing a baseball at it... (accidental damage) which the original manufacturers warranty wouldn't cover anyway, I don't think Mastercard will cover it either.