Vemeco inc This company, will not uphold the warranty with the terms that they set up. alvarado, Texas

I purchased a auto warranty in august of 2009 from the now defunct U.S. Fedelis company.  The warranty went though this company called Vemeco who is the administator of the policy.  The policy was $2074.00.  2 weeks ago the engine in my 2001 Pontiac Grandprix started knocking.  I had the car towed to Pep Boys Auto in Trotwood Ohio.  The looked at the car and said that is spun a rod bearing.  They called the warranty company and they came out.  First the wanted me to approve removing the oil pan at a cost of $418.50. 

They told me that they needed to inspect for sludge.  After removing the pan no sludge was found.  Then they wanted another inspection to inspect the bearings.  They found it was an isolated bearing bearing problem.  The denied the claim for the reason they said that the car had blown a head gasket at some point in the cars life and thats why it spun a bearing now.  The company is a total rip off.  The repair shop stated that they ALWAYS disaprove claims.  They wil take your money and not do any repairs.