First American Home Warrantyinsists on payment of $2,400 for non covered items when entire job is $2,100 retail price from reputable contractor

A/C went out on May 25. First American Home Warranty (FAHW) assigned North Star Mechanical (who has a one star rating on Yelp). North Star Mechanical (NSM) was supposed to come out on May 27 between 2 and 6. They did not show or even call to say they would be late. I called FAHW to tell them of the no show. When I mentioned water damage to our ceiling from the A/C, they upgraded our request to "emergency" status meaning they will resolve the problem within 24 hours. NSM finally showed up at 9:30 at night and attempted to diagnose the problem in the dark with just a flashlight. They added 4 pounds of Freon which made the house a little cooler that night. However, the next day the problem was back as the Freon leaked out again since the leak had not been repaired. FAHW and NSM were informed and four days later NSM sent another tech. He found a leak in the evaporator coil. He said there would be $1, 660 of alterations needed which are not covered by FAHW. I went through the list with him and he said most of the alterations did not apply to me so I needn't worry about it. However, when I called FAHW, they said that number had increased by almost 50% to $2, 400 of "uncovered" costs. They said that they are obligated to pay for parts and labor but will do nothing for me (in the Texas heat for 10 days by then) unless I agreed to pay the $2, 400 in "uncovered" expenses. I contacted a reputable A/C contractor (Lapoint Services LTD) and paid them $288.03 to diagnose the problem. They said the exact evaporator coil is readily available and even had Trane put one on hold for them. They told me that no alterations or modifications of any kind are needed - just the part and the labor to install it - and the total cost for everything (part, labor, sales tax, Freon, everything) is $2, 110! That is almost $300 less than FAHW wants me to pay for just the unneeded modifications! We have now been sweltering in the Texas heat for almost two weeks (with no end in sight) as FAHW refuses to do the job they are contracted to do unless I agree to pay them $290 MORE than the retail price of the entire repair!
My only option at this point is to authorize the reputable company to do the repair (cheaper than using home warranty) and then file suit in small claims court for the damages and expense incurred by FAHW's failure to perform their contracted obligations. I have over 5 hours of phone conversations with FAHW recorded on my cell phone.

insists on payment of $2,400 for non covered items when entire job is $2,100 retail price from reputable contractor
insists on payment of $2,400 for non covered items when entire job is $2,100 retail price from reputable contractor
insists on payment of $2,400 for non covered items when entire job is $2,100 retail price from reputable contractor
insists on payment of $2,400 for non covered items when entire job is $2,100 retail price from reputable contractor

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