Entirely unreasonable, because they could say that for any component, rendering the warranty entirely worthless. If you were sold the warranty with a car by a car dealer, then take small claims track action against the dealer for both selling you a faulty car and a worthless warranty. Warn him first because he may capitulate. If you bought the warranty yourself, aftermarket, then if it's an insured warranty you can take the matter up with the FSA. If it's a self-insured warranty you would have to use the small claims track to sue the warranty company itself.