So? Every policy has a deductible. $500 is pretty much the minimum these days and wouldn't have been a surprise had she read her policy when she got it.

Anyway, she's covered for the damage to her personal property and, possibly for any additional utility costs beyond her normal costs if she pays for utilities separately. She can submit her bills to her insurance company later. If she can't sleep in her bedroom, her insurance could have paid for temporary lodging in a motel for a couple of days. It's called Additional Living Expenses and it's in her policy.

The apartments aren't liable to her for anything. I can understand her frustration but the failure of the water heater was sudden and unforeseen. The maintenance man's "opinion" that water heater's should be replaced every 9 years is irrelevant and ridiculous. Machines don't get replaced if they still work.