American Home Shield I'm The Boss Enterprizes Hot Water Heater not up to code & refusal to repair broken pipe in wall Las Vegas Nevada

My Hot water heater went out Dec 24, 2016.  American Home Shield could not get their plumber their until Dec 28, 2016.

The plumber said my hot water heater was not up to code and he would have to build the wall out and move the vent to make it to code.  It was to cost me an additional $775.

I did not understand why when it had earth quake straps, a pan and had been like this since 1994 and I had had it replaced three times before with no problems. The plumber could not explain what was wrong but just that it wasn't close enough to the wall.  It didn't seem right to me.  He went to his truck to call his office.  I went in the house and my kitchen, pantry, dining room and living room was being flooded from a broken pipe in the wall.  I turned the water off and tried to suck it up with the shop vac but it was still running all over.  I went out to his truck and asked him to help me, he came in looked at it and said he could not because I didn't have a claim for that.  He gave me a card for the home restoration service.  

My sister sent her plumber immediately and within an hour had the pipe repaired.  He fixed my hot water heater no problem and replaced all the fittings to.  The Home warranty service refuses to pay for the broken pipe repair and will not let me file a claim because they state I had it fixed before they looked at it.  But in fact the plumber was there and saw it.  They want to pay me only what they would pay for a direct vent water heater, less the fittings and the labor.  I paid $1850 for both repairs.  The only want to pay me $1293.59.  They did not state that when I called and complained about their plumber trying to rip me off and they told me I could use my own plumber.

I called the city code department and they stated had I let him build out the wall and move the vent they would have questioned it.  That proves to me that he was trying to rip me off as well.

I pay good money every month for this warranty and now I am wondering why.