Busted water main

Regular readers know that our basement was recently flooded when my neighbors' water main broke underground. They first heard the sound of rushing water Thursday, but couldn't figure out where it was coming from. On Monday, I told them.

It flooded their basement and my basement, and moistened the basements to either side of us. The main broke after the meter but before the main shut-off valve, underground where it was difficult to detect. (I got to see what an old lead pipe with a three-inch gash in it looks like.)

It turns out that my insurance company won't cover water coming up from the foundation: seepage, even with a traceable antecedent cause, is seepage.

The only way my neighbors' insurance will pay me is under a negligence claim. I can think of three possible theories:
(A) There was some sort of water company pressure spike that ruptured the pipe, and the water company owns up to it, and gives everybody lots of money. (None of these elements is likely.)
(B) The water company should have noticed the pressure drop and lost water: a minimum of 3,000 gallons in each basement, plus untold 1,000s still in the ground.
(C) The neighbors should have been more dilligent at pursuing the leak at any point over the Thursday - Monday time period. (Ever since I became a homeowner, I know that the identified sound of rushing water gives me the screaming fits.)

If anyone has an opinion -- or better yet, DC case law -- on any of these theories, please leave a comment by clicking on the timestamp below.