I have a power train warranty on a used truck I just bought through Auto Serivces Company which covers me up to 3,000 for 36,000 miles or 3 years. A week or so after I bought the vehicle the engine threw a rod, which is definately covered by my warranty. The shop I took the truck to took out the engine and diagnosed the problem. The labor the shop charges on this is 1150, and the mechanic said an engine would be about 1,000 dollars. The warranty company has told me that it will only pay a total of 1200 for this repair as the estimated labor costs are only 300 dollars. Obviously this is a problem for me. My contract says that the company will pay the repair shop or agreement holder up to the limits of liability for the reasonable costs (as determined by the company). This last bit puts me at a disadvantage. What I was wondering is if there is any legal guidelines companys must follow in determining "reasonable" costs. If all the shops charge 1000 dollars to take out and install and engine, can they consider 300 dollars a reasonable payment for this?