APCO EasyCare Auto Service Warranty

In an earlier post, I mentioned that I was having the local BMW dealership (Richmond, VA.) complete a repair of the secondary air pump (emissions et al), due to a regular SES lite. Subsequent diagnosis by the BMW techs discovered a ‘short’ in the water temp sensor. Disassembly uncovered ‘corrosion’ and a leaky seal on the thermostat end. (Sensor plugs into the thermostat housing, on the engine block) Water had leaked into the conduit (wiring harness), that attaches to the OBC(DME). Water vapor had made it’s way up the harness, and corrosion on the OBC (DME) end had caused a ‘short’ in the OBC (DME), thus the constant problem w/the SES indicator remining on. The air pump was in need of replacement, so no mis-diagnosis there. The problem w/the short in the OBC (DME) was discovered after the air pump/emissions repair had been completed. Easycare had pre-approved the air pump repair, so no problem there. The additional claim (for a new OBC (DME) and wiring harness) was submitted to EasyCare for approval. A field adjustor made a trip out to inspect the car. His report back to the home office was that ‘corrosion’ caused the problem? Of course anyone with an automotive technical background would probably arrive at a different conclusion, perhaps – the corrosion was a result of the leaky seal in the sensor at the thermostat housing? This company has become increasingly difficult to deal with. The BMW dealership recommeded a replacement of the DME (OBC), around $1200.00US for a new one, including the new wiring harness from the thermostat. This is an expense (leaky engine seals) that should be covered under the terms of my TotalCare coverage that I purchased from the dealer I purchased the car from. I’m at a lost to understand how they can deny this claim? What are my options? Must I file a civil suit against them, to force them to repair covered components? Ron withheld, VirginiaU.S.A.