If the machine that caused the flooding/water damage was used following the instructions, and is within warranty, they are obligated to fix it or replace it with a new machine of the same or similar type. As to your insurance, I'm pretty sure that if you have insurance for water damage, they are also obligated to fix the resulting damage, unless your insurance plan only covers damage done by natural disasters. I suggest going through your insurance handbook and see what your policy covers. Either way, one of them HAS to pay for something. If the manufacturer won't cover it because it's "user error" and your insurance covers accidents, you can and should be able to use the manufacturer's statement to get your insurance to cover it, if you can get a written report on the cause.

1. Cover kitchen in rice. 2. Let dry for 24 hours. 3. Press and hold top right button to try and reboot kitchen. Worked wonders for my iPod.