With Squaretrade,
if your Kindle can't be fixed they give you back the full price you paid for the device then you can buy a new one.
The Squaretrade warranty also covers replacements done by the manufacturer. So if you did return your Kindle through Amazon and the replacement is a refurbish unit. It's still covered. If later down the road it breaks or you accidental break it and it can't be fixed they will send you a check or paypal you the full price you paid and you can buy a new one.