Home warranty refused to repair AT

[Ting Lai]

My friends and I owned a small multi (12 units) in Tucson, AZ and have had the home warranty that came with the purchase since last year (Nov). One of the units recently had AC issues and the home warranty company sent one of their network companies to assess. They commented:

"the compressor breakdown was a result of secondary damages due to the poor maintenance conditions of the evaporator coil and therefore will not be covered by the company service plan" and they quoted a ~$2700 out of pocket repairs, or even a brand new AC. 

The main coverage definitely included the AC but it was shocking to receive this notice. Is this legal / reasonable? Does anyone have such experience with home warranty company?

PS: in my previous posts I also had suboptimal experience with this home warranty company and am finding alternative companies / solutions once the contract is over. I appreciate the advice from many experienced folks here and would highly appreciate your thoughts around: 1) whether you have encountered similar experience and how did you overcome this 2) what are other suggestions / action oriented solutions? 

Look forward to your feedback!