How do I proceed with making my warranty company pay for my vehicle repairs?

I have an extended warranty that I purchased seperately from my Credit Union for a used vehicle (2002 - Volkswagen Jetta). The cable that runs from the alternator to the batteries fuse box is burned out as well as the fuse box and all the fuses. The Volkswagen dealership could not determine with absolute certainty what caused the wire and fuse box to burn out. My warranty company is refusing to pay the claim because the folks at Volkswagen can not tell them what caused the failure. They are suggesting that I take the car (which is inoperable) to another electrical shop to get another test done. There are no other electrical shops in town that would be able to tell me something that the dealer that works on this model day in and day out can't. The Volkswagen folks have the right equipment to test all vehicles but there was no code that could tell them where the failure arose. I have paid a lot of money for this warranty and it has not done me a bit of good. Also the warranty company is making the assumption that the battery was hooked up improperly which is physically impossible. Of cousre they have mentioned that the claim would not be paid if it is determined that the battery is the cause. What steps should I take from here?