Knowing and proving are two different things. We can talk negligence theory until the cows come home but it won't change the reality.
I was a landlord for 20 years with three rental houses. I can guarantee that you'll never get a nickel from the tenant for any water damage to your property so you might as well have your insurance cover the damage and be done with it.
If you want to apply his security deposit to your deductible, you're welcome to do that and hope you don't get sued for it because if you end up in court over this you really have no proof of anything.
I don't know how long you have been a landlord, but you should know that this is your reality when it comes to damage.
And, no, you don't have to return rent to the tenant. If he had a renters policy it would cover his living expenses while he was away from the rental. If he didn't have a renter's policy, it's on him.

