SPOKANE — Most of the homes destroyed in last year’s Gray and Oregon Road fires were underinsured, according to an analysis of insurance claims by the state insurance commissioner’s office.
The fires burned more than 20,000 acres and destroyed 366 homes near Elk and Medical Lake on the same day in August 2023.
Washington state Insurance Commissioner Mike Kreidler’s office initiated a data call in June to collect information from insurance companies that had a loss associated with the fires.
A news release Monday said the results showed 355 “significant dwelling claims” consisting of at least $10,000 in dwelling loss and $10,000 in personal property loss. Of those claims, 244 had paid out 100% of their coverage for damage and 162 are still open.
“That’s a sign that in most cases, the coverage limits were reached,” Kreidler said in a statement. “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.”
The data also revealed that 737 total claims were made relating to the wildfires, and 664 of those claims resulted in a payment. Insurance companies had paid out a total of $212.2 million as of July 31, 2024, for an average payment amount of almost $320,000.
Medical Lake Mayor Terri Cooper, who is also president of the Spokane Region Long Term Recovery Group assisting residents affected by the fires, said Monday the numbers from the insurance commissioner’s office make sense.
“I don’t know of a single person not underinsured,” Cooper said.
Not all the claims filed covered direct damage to a home. There were 111 claims of personal property damage, outbuilding damage or loss of use coverage. And 98 claims had both a time limit and dollar -amount restriction, the most common being 24 months.
Kreidler urged homeowners to review their policies regularly to ensure coverage meets the costs to fully replace their home and possessions should a loss occur. He recommended those who live in wildfire-risk areas should have at least 24 months of loss-of-use coverage because of the time it takes to rebuild.
Property values rose rapidly during the COVID-19 pandemic, which along with supply shortages and higher labor costs meant most coverage polices did not keep up with home values. Most homeowners didn’t think about updating their policies right away, so the fire was “literally, a perfect storm,” Cooper said.
Cooper echoed Kreidler’s comments, encouraging homeowners to reach out to their insurance company to make sure their replacement coverage is up to date, that it covers wildfire and includes debris removal funding in case of total loss. Homeowners can also educate themselves on how to make their homes more defensible from fire and insurable.
At a policy level, Cooper said she is looking at ways to prevent insurance companies from dropping entire ZIP codes they consider high risk by using a standardized and evidence-based risk assessment factor. She is also encouraging the Legislature to pre-fund dollars for debris cleanup, which would provide a quicker path to rebuild.
Late last month, a group of more than 60 insurance companies sued Inland Power in an effort to recoup the insurance claim payouts made to policy holders affected by the Gray fire. The suit alleges the utility company was negligent with a faulty light pole that started fire.
