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It would save you having to pay the excess and it would save your policy from going up by xx% next year.

I would like to think so, the tenants negligence caused the damage, the tenant "should" pay. If you rented a car and damaged it through your own negligence would you be expected to pay for it? If you rented anything and damaged it through your own negligence would you be expected to pay...

That would be my thought to at least get the ball rolling. Giving them all the details of course.

Well in this situation who was at fault? Sounds to me as if the tenants pillow, falling on the heater caused the fire. If the heater was placed a safe distance from the bed would it have been an issue?

Do you even have the right to sublet?