Shocking Experience with AA Warranties

Shock of my life - My vehicle failed to start due to oil pump failure, this resulted in engine to seize. I have been informed that my warranty will only cover the Oil pump and the rest of the engine I need to pay for. Honestly I do not understand the logic behind this - Only the cause of the problem is paid for and not the results of the problem. I am really not asking for much - My quote is R50K and AA is only paying R3500.00 - I know I am covered for a maximum amount of R30K why can't AA just pay that and I can pay the balance? I have been with AA for more than 4 years without default.