Engine problems of the 2003 Volkswagen Jetta

2003 Volkswagen Jetta caught on fire while driving. A vehicle following my sons car on a major interstate (my son was out of state returning home) noticed smoke coming from under the car and blow horn and flickered lights. My son looked in his rear view mirror and saw smoke and immediately pulled off the road. The fire department was called by vehicle following. The Jetta never lost power and when he pulled off the road and he had to turn the ignition off. The Jetta was smoking and the fire started immediately and with in minutes full flames. There was a loud boom and it came from the front of the Jetta. The fire department could not get the fire out and had to break through the hood. The whole front (engine area) was burned. The Jetta was still under warranty therefore we personally went to the dealership to report (thinking still under warranty they would provide a rental and want to investigate) all they did was refer us to Volkswagen. I contacted Volkswagen on March 27, 2005 and to make a long story short I had to report to my insurance. Volkswagen also told me that if it was a manufacturer defect. . . . They would only pay what insurance would pay??????? my son also talked to the owner of the dealership and all that was said is he (the dealership owner) was sorry and good thing he (my son ) had insurance. The dealership didn't even offer to try and help us get back into a vehicle. There was no indication (no engine warning, no power lose, smell etc. ) there was anything wrong. The smoke was going up under the Jetta and out under the back. The blessing is the vehicle behind my son. . . . What if he hadn't caught my sons attention?????????? the auto insurance didn't cover for what was lost in the vehicle, just the Jetta. All scheduled maintenance were done as recommended by Volkswagen?????.