Category matters because it decides what can be saved and what must be removed. Clean water caught quickly often lets you dry and keep materials. Black water almost always means removing and disposing of porous contaminated materials for safety.
Water can also change category over time. Clean water that sits for more than 48 hours, or migrates through contaminated building materials, degrades to gray or black. That is another reason speed matters - waiting can turn a simple loss into a biohazard cleanup.
Insurers treat the categories differently too. Category 3 losses require documented PPE, extraction, and antimicrobial steps, and that documentation is what keeps the claim moving.