Re: WK - Warped Cylinder Heads - Bad Engine -- Help!
Unfortunately this is normal operation for service contracts. Like you, they don't want to be left being billed for tear down for a repair they don't cover. I understand their side of it but I also understand that it feels like a shady way to get out of repairs, scare the customer into not paying for tear down then they wont have to pay for the repair.
I would be interested to know if there is ANY reason they would cover the head gaskets. They don't because of an overheat but with the common head gasket issues on these how do they know what came first, did it overheat because of head gasket failure or did it blow a head gasket because of the overheat. Ultimately you will need to talk with them and deturmine if there is ANY reason they would cover it, if they just bluntly put it as "no not with the concern you brought it in for", find a cheaper shop and fix it, If they cannot say, trust me the shop wants the business, they will do what they can on their end to help you, how the techs story is written, how they explain the failure to the 3rd party inspector... service contracts pay book time, unlike warranty, so the dealer getting the contract company to cover it is in their interests as much as it is in yours. Obviously they dont have a magic wand, if the contract company is not going to they are not going to, but I think legally they have to PROVE how the failure happened and how it does not fit into a covered area of your contract, otherwise they must pay for it.