Long Extended Warranty Story...
I had a 1996 Corvette with an extended warranty. I was getting a check engine light, so I took it in. They tore it apart, and diagnosed it. There was a sensor ring that is pressed onto the front of the crankshaft that had come loose, all that was needed was to have the sensor ring pressed back into place.
The problem was is was all labor, no parts other than gaskets. They had to pull down the whole front of the engine to get to it. Radiator, water pump, opti-spark assembly, timing chain, and even the steering rack that was in the way had to be removed. Aftermarket warranty company said they were not covering the 20-something hours of labor. Their reasoning was they only pay for labor to replace a defective part, but not the labor to reinstall a "loose" part.
I got denied twice until I asked to speak to someone that has some mechanical background. I finally got a manager who was also an ASE Certified Mechanic, and the conversation went something like this:
Me: So you won't pay for the labor because there are no broken parts, just a loose one?
Them: Correct. The sensor ring is not broken, and we don't pay for labor only.
Me: So what if the sensor ring was broken, what would you do then?
Them: The sensor ring is part of the crankshaft, and is attached from the factory. You can't buy it separately.
Me: Okay, you're saying the crankshaft is broken. Pull the motor, and install a new crankshaft. The sensor ring broke off of the crankshaft.
Them: That would be ridiculous! It only needs to have the sensor ring pressed back on!
Me: Okay, so press it back on, or instal a new crankshaft, that's the broken part. Your choice.
(15 seconds of silence on his end.)
Them: Fine. You win. We'll pay the labor.
Moral of the story? Be persistent, polite and hold your ground...