If you have a loan on the unit, it must be insured. I would file a claim with the insurance company for the water damage and see where that takes you. Let the ins. co pay so you can pay off the bank loan and be done with that. If they leave you with the unit then you can go ahead and part it out. I would not start by parting it out because you are damaging the bank's security interest in the trailer, and they can come after you for that.
As an aside, if you do strip it, the frame and running gear can make a great flatbed utility trailer.