We present a general formalism for polarizable electrostatics based on fluctuating bond-charge increments and polarizable dipoles and its application to a five-site model for water. The parametrization is based largely on quantum-chemical calculations and should be easily transferable to other molecules. To examine basis-set effects we parametrized two models from two sets of quantum calculations, using the aug-cc-pVTZ and aug-cc-pVQZ basis sets. We computed several gas-phase and condensed-phase properties and compared with experiment or ab initio calculations as available. The models are quite similar and give condensed-phase properties at ambient conditions that are in reasonable accord with experiment, but evince errors consistent with a liquid-state dipole moment that is slightly too large. The model fit to the aug-cc-pVTZ basis set has a smaller liquid-phase dipole moment and thus gives a somewhat better description of liquid water at ambient conditions. This model also performs well away from room temperature, deviating less than 2% from the experimental density from 0 to 100 degreesC, and showing good agreement with experimental radial distribution functions, although the temperature of maximum density (similar to 20 degreesC) is slightly too high and the model somewhat underpredicts the persistence of the hydrogen-bond network at elevated temperatures.