Well, it is clearly stated in most compact SUV manual that it is only safe to cross a body of water up to a height not deeper than the lower inner wheel of the vehicle.

If you try to cross a flood deeper than that - it is at your own risk and would not be covered by the warranty since that kind of vehicle is not designed to operate like that.

Holes in the engine block? Maybe they did hit a submerged debris while crossing the said flood...