Insurance paid more than $212 million for Gray, Oregon Road fires, but commissioner says most weren't made whole - Insurance News | InsuranceNewsNet

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November 25, 2024 Newswires
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Insurance paid more than $212 million for Gray, Oregon Road fires, but commissioner says most weren't made whole

Thomas Clouse, The Spokesman-Review, Spokane, Wash.Spokesman-Review

Nov. 25—As the calendar approaches Thanksgiving, dozens of property owners face a second winter living in temporary shelters following the devastating Oregon Road and Gray fires that ravaged areas around Elk and Medical Lake.

Data collected by the Washington state Office of Insurance Commissioner shows that insurance companies have paid out more than $212 million for claims from the fires that burned about 21,000 acres and destroyed 366 homes on Aug. 18, 2023.

As a result of the fires, some 355 fire victims put in "significant dwelling" claims, which had more than $10,000 for loss of a home and more than $10,000 worth of personal property destroyed. Of those claims, some 244 residents received insurance payments equaling 100% of their coverage limits, and 162 remain open .

"That's a sign that in most cases, the coverage limits were reached," Insurance Commissioner Mike Kreidler said in an email. "It's a tragic loss for the people involved in these fires and an unfortunate situation to not be made whole after a life-changing event."

Of those 244 homeowners who put in claims for their houses, 75 did not have what's called extended-replacement-loss coverage. That means they received only the value of the home when it was insured, and they were not reimbursed for any increased costs for materials or labor.

Some 169 homeowners did have that coverage and were able to recover more than their policy limits, according to the data.

However, insurance companies dropped 32% of all persons who filed claims for significant losses. Of those canceled policies, some 36 were not renewed, while 79 others were cancelled mid-term.

Medical Lake Mayor Terri Cooper, who is also serving as executive director of the nonprofit Spokane Region Long Term Recovery Group, said that organization has connected resources and volunteers that are building eight homes for residents from both fires who would otherwise not be able to rebuild.

"We have two homes in Medical Lake and six in Elk. They are all identical," Cooper said. "What's important about this is that there are probably a dozen people who still need help."

Federal, state and local groups that have tried to get fire victims resources were saved, somewhat, by a mild winter last year. The forecast for the upcoming cold season is calling for more snow.

"I think between both areas we have close to 15 people still living in RVs," Cooper said. "We, with some other nonprofit groups, have helped get those winterized, but being in an RV in the winter is not ideal."

Both Cooper and Kreidler said homeowners need to pay attention to their policies regarding what's called "loss of use coverage." That pays for things like rent for families if they are displaced by a fire.

Kreidler recommended that residents who live in wildfire risk areas make sure they have at least 24 months of loss of use coverage due to the extended time it has taken to replace homes.

Cooper said she's aware of many residents who have exhausted that coverage already.

Staggering numbers

All told, property owners filed 737 claims from the two wildfires that raged on the same day. Some 111 of those sought damages for lost outbuildings or other property.

With a total of $212,188,637 paid out by insurance companies, that averaged about $320,000 per claimant, according to the state data.

Cooper said the work to rebuild homes and property has come slowly.

About 67% of the homes in Medical Lake city limits have been rebuilt, but it's about 50% for unincorporated Spokane County for both fires.

In the Elk area, a full 40% of the victims had no insurance for their homes.

"Some of those are on generational family land where you had multiple families living on the property," she said. "Some of the older structures that could not be insured were total losses. A number of them had barns or shops. A lot of that loss was not covered. Insurance companies weren't helping people with that."

Regardless of the level of preparedness, the fires destroyed more than property.

"Even for people who were in the best position, it's almost impossible to replace everything you had," Cooper said. "It's important to realize that for folks who had this traumatic experience, their lives are defined as before the fire, and after the fire."

Helping insurance companies

While many residents were not made whole and still others lost their coverage, Cooper said it's important for local officials to try to find solutions for the private companies that provide safety nets.

Cooper said she's had several conversations with the insurance commissioner's office about standards that insurance companies use to determine whether a property falls under a high risk for natural disaster.

It turns out, each company makes those calculations on their own, she said.

"They use their own standards," she said. "It's not set by the feds or the state. They use an independent company that comes up with the risk. It's not regulated. It's suspect."

She also asked the state office to host a symposium to bring the various companies together to discuss the problem.

"Let's ask them, 'What do you need from your customers and from the state and local government? What would it look like to have disaster preparedness and defensive space?'" Cooper said. "They paid out an incredible amount of money. We need to help them. We need them to stay.

"If they leave, we will pay twice as much for half the coverage. That's bad for everybody."

As far as government solutions, Cooper said she will continue to work with the governor's office to develop a reserve account to help residents with toxic cleanup following natural disasters.

Following floods and hurricanes, federal agencies send in teams of crews to immediately help clean up any toxic materials. It's not only safer, it means homeowners can start to rebuild faster, she said.

In the Gray and Oregon Road fires, any victims who had asbestos detected sometimes faced bills of $65,000 to $80,000. Those costs came out of insurance payouts even before the victims began to build new homes, she said.

"If the government would come in and do the cleanup ... it shortens the amount of time people are out of their house. Then insurance companies wouldn't have to pay them for time out of their houses," she said. "These are the folks who have least amount of resources. It's a vicious cycle that is really counterproductive to recovery."

___

(c)2024 The Spokesman-Review (Spokane, Wash.)

Visit The Spokesman-Review (Spokane, Wash.) at www.spokesman.com

Distributed by Tribune Content Agency, LLC.

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