Is the "no" in writing?

I don't think so. Maybe it's in an email from our real estate agent but I think it was verbal. Dumb!

Unfortunately without it in writing or something in the contract stating there were no issues with it you will be stuck footing the whole thing your self.

Even if the "no" was in writing, how would you prove that the sellers actually ever did have water in the basement or were aware of this issue? It sounds like you've lived there for several months and only discovered it yourself when renovating. Things like this happen - chalk it up to bad luck and move on.

Depending on what state you live in the sellers disclosure (even a legally required one in writing) may no be worth anything.

In some states the only recourse is a civil suite if the seller will not offer repairs.

It is often VERY hard to prove that the seller knew of the issue.

If the house is not brand new it will have defects.
And plenty of new ones have defects also, it is just easier to go after builders if there is a required warranty.

Did any fire trucks drive over the line location?

Even a correctly buried line may not survive a 60,000+ pound fire truck driving over it.

Well, the fact that everything the previous owners cost us is the only reason I even contimplated the question. You would not believe the crazy, illegal and totally illegal things they did with gas, electrical and plumbing. We had little reason to go into the basement right now because the washer/dryer is going on the second floor. There are elctrical wires hanging down from the ceiling so it's not exactly a place to hang out. We did have to replace several sewer pipes so that was an indication something was amiss. There has been no telltale signs with the exception of an experiment we ran which was running the tub water for ten minutes and seeing the water downstairs.
There were five fire trucks on the street the day of the fire but not any in our driveway.
So, the factI had to eat the $2500 deductible I had and had to pay to replace the side of the house, now this biggie...well, you get the idea. Not to mention all the serious, not cosmetic, fixes.

"There are elctrical wires hanging down from the ceiling so it's not exactly a place to hang out."

That would seem to be a readily apparent defect you should have noticed, even without an inspector.

Did you have any kind of inception done?

I renovate and repair houses, so I run my own inspection.

Flushing toilets while running sinks and draining tubs is not all that hard.

If you see galvanized steel supply or DWV lines you can guarantee they need to be replaced.
No testing required.
They are way past there projected life.

Cast iron (typically caulked joints on older work) needs a careful examination of any visible joints.

If you do not know how to tell what might be wrong, pay an inspector.

OH, I meant the electrical is hanging from the ceiling because the electrician has to upgrade the wiring. They weren't hanging when we purchased the house.
Yes, we had the most useless inspection from Tiger Home Inspection. (We live in MA). Absolutely horrible. We paid $500 for nothing.
I think once we are done we will have replaced every bit of sewer pipe from the roof down.

I've never had a "great" inspection experience. If you're lucky, the inspector you hire will be an expert in 1 trade and can catch some of the basic problems in a home (toilets won't flush, heater not working, etc.). IMO, it's worth hiring a master electrician and plumber to really give a house a once-over before buying. For example, all our pipes worked just fine in our home (inspector thought everything was great) but the plumber I hired immediately spotted some issues with our radiant heating system (manifolds were cheap, type of system not ideal for the way it was installed, etc.). When we purchased our 2nd home we had 5 different experts in the home before signing the papers (and this was a 1990s era home).

I'm surprised your inspector did not detect the water / sewer issue. A home warranty (NOT home owners insurance) would have covered most of your plumbing problems.

Sorry to hear about the fire next door. I wonder if the insurance co. over there would cough up the $2500 you are out of pocket? I'm not sure how homeowners policies work with respect to 3d party claims, or how theirs is written, but it might be worth checking into. If nothing else ask your own agent if that kind of thing is even possible.