So, Since i do not know much, What happened was that something leaked and the drive belt shredded.

One of my friends mentioned that it most probably is a water pump failure.
What do you guys think?

Would this be covered under my CPO warranty?

 

Yes, sounds like it should be covered by CPO warranty. The drive belt is relatively easy/cheap to replace. I'm not familiar with what could cause the drive belt to snap other than old age - it's a rubber belt that cracks from heat over time.

Not sure about the water pump - keep in mind the drive belt is different that a timing belt (usually replaced with water pump on other cars). In fact, our cars have no timing belt, it's a timing chain that should not need servicing.