You can ring up tens of thousands+ overnight with AWS. The scale of potential damages is nowhere even close.
Unlike cloud services, your electrical service has a literal circuit breaker. Got a regular three-phase 230V 25A hookup? You are limited to 17.25kW, no way around that. If that shithead neighbor tries to draw 50kW, the breaker will trip.
If it were the cloud, the power company would conveniently come by to upgrade your service instead. A residential home needing a dedicated 175MW high-voltage substation hookup? Sure, why not!
Water leaks, on the other hand, tend to be very noticeable. If a pipe bursts in the attic you'll end up with water literally dripping from the ceiling. It is very rare to end up with a water leak large enough to be expensive, yet small enough to go unnoticed. On the other hand, the cloud will happily let your usage skyrocket - without even bothering to send you an email.
There are plenty of compute service providers working with a fixed cap, a pre-pay system, or usage alerts. The fact that the big cloud providers don't is a deliberate choice: the goal is to make the user pay more than they wanted to.
As always, it just doesn’t make an awful lot of sense to compare physical and virtual worlds. As in leaving your front door unlocked in rural areas vs not securing your remote shell access.
The broken water pipe should be covered by buildings insurance, but I can imagine it not being covered by some policies. Luckily a broken water pipe is likely not as expensive as not having e.g. third party liability protection if part of your roof falls off and hits someone.
For the cloud, I have the good will of the cloud provider and appealing to social media. Not the same thing.