it's unlikely that water in the engine will have damaged the turbo or intercooler and the cat will quickly recover as it gets red hot within seconds of engine starting

That's the potential problem-quench cooling of hot parts.

However, unlike petrols, water rarely enters a diesel engine via the exhaust, so it is unlikely that the exhaust components have been damaged. So the insurers are right (and full marks to them for being dilligent and keeping a close eye on costs).

The water that you saw trickling out of the tail pipes would have entered the exhaust after the engine stalled, so it is not as bad as it looks. Presumably they are having to rep;lace the engine because the engine ingested water and hydraulically locked.

I wouldnt be concerened about the Intercooler or CAT. I would be concerened ( very much so ) about the turbo.

When water travels through a turbo it can distort or weaken the turbo blades causing an imbalance and risking turbo failure with possible engine damge if fragments go through the engine.

I have actually replaced many engins as a result of flood damage and never been refused a turbo replacement.

Personally I jet wash DPF's ( cats ) on Diesel mercs when they block up and never had a repeat failure or any issues.

Its still begs the question are drivers really not aware that a turbo diesel engine air intake is like a Dyson hoover even when you lift of the throttle , water and cars dont mix ! & i am still astounded how many cars just plough through flood water like its fun!

In an ideal world you should replace everything but the insurers aren't going to wear that, it's unlikely that water in the engine will have damaged the turbo or intercooler and the cat will quickly recover as it gets red hot within seconds of engine starting, any moisture will be burned off, remember water is a product of the combustion process anyway, you'll see it in the form of steam or water drips from the tailpipe on a cold day.

In an ideal world you should replace everything but the insurers aren't going to wear that, it's unlikely that water in the engine will have damaged the turbo or intercooler and the cat will quickly recover as it gets red hot within seconds of engine starting, any moisture will be burned off, remember water is a product of the combustion process anyway, you'll see it in the form of steam or water drips from the tailpipe on a cold day.

In an ideal world you should replace everything but the insurers aren't going to wear that, it's unlikely that water in the engine will have damaged the turbo or intercooler and the cat will quickly recover as it gets red hot within seconds of engine starting, any moisture will be burned off, remember water is a product of the combustion process anyway, you'll see it in the form of steam or water drips from the tailpipe on a cold day.

In an ideal world you should replace everything but the insurers aren't going to wear that, it's unlikely that water in the engine will have damaged the turbo or intercooler and the cat will quickly recover as it gets red hot within seconds of engine starting, any moisture will be burned off, remember water is a product of the combustion process anyway, you'll see it in the form of steam or water drips from the tailpipe on a cold day.

Thank you to those who took the trouble to respond. I appreciate your help and advice.