Well so far all pain free, contacted dealer who called back within the hour to confirm that they are liable. Body shop contacted me and are sending someone out to visit the car at my home address. Once they have pics etc said it will take couple of weeks for approval and were off.
Body shop representative said as car is under 10 years old Vw will cover 100% on goodwill, as long as rust source is inside eating out, well no doubts regarding that.