This is one of several reasons why I don't put hardwood (or bamboo) floors in rental properties, or in kitchens, bathrooms, or entryways of my own home.
"It's never happened before" isn't a particularly good defense here, as it sets up a you-said/they-said dynamic that is ultimately unprovable on either side.
How large of an area are we talking about?
Do you plan on keeping this property as a rental going forward?
How does it compare to similar units in your immediate area?
Personally I wouldn't report a $5k expense to insurance, but I keep a $2k deductible and wouldn't want to increase my premiums for what is (in the grand scheme of things) a rather small expense for a landlord.
If it were me I'd remove the damaged flooring and replace it with QUALITY (not cheap) LVP myself. I would also review my rental agreement and ensure that there's language about keeping a dehumidifier running at a certain humidity level (I'd do 55%) continuously. If there isn't one already, I'd buy one and install it with a drain hose (no reservoir to continuously empty).