BC Resort Destroyed by 2023 Wildfires Sues Insurance Company Over Shortage in Coverage

Smoke from the fast-burning McDougall Creek wildfire is seen from Westbank, B.C., on Aug. 17, 2023. The Canadian Press/Joe O'Connal

Owners of a B.C. resort destroyed in a 2023 wildfire have filed a civil lawsuit against an insurance company, saying a lack of coverage has prevented the rebuilding of the resort.

The Lake Okanagan Resort was one of nearly 190 properties destroyed or damaged by the 139-square-kilometre (13,900 hectare) McDougall Creek wildfire that burned for weeks in August 2023.

The lawsuit says most of the buildings and utilities at the resort were destroyed by the wildfire.

The resort and a related holding company have named Western Financial Group in the lawsuit, claiming despite several insurance packages for the property, no policy covered the utilities on the resort. It says they are unable to rebuild “due to lack of water, sewage, and electrical services.”

Buildings that survived the wildfire do not have utilities and cannot be occupied.

The companies said they had several insurance policies, including coverage for the marina and gas bar, a commercial general liability coverage, a policy for the resort property, and a policy for “environmental impairment liability.”

The lawsuit says that Western Financial Group did not inform plaintiffs of the gaps in coverage.

The allegations have not been tested in court.

Western Financial Group told The Epoch Times in an email that it was not able to comment on the case as it was before the courts.

The wildfire that destroyed the resort swept into West Kelowna on Aug. 17, 2023.

The McDougall Creek fire started about 10 kilometres north of the city on Aug. 15, according to the City of West Kelowna’s website.

A local state of emergency was declared on Aug. 16.

It is the largest wildfire in history in West Kelowna, the city’s website said.

More than 10,000 residents were evacuated over three days. It took more than 500 firefighters from municipalities around the province and the United States to bring the fire under control. The wildfire was no longer categorized as a “wildfire of note” on Sept. 24, 2023.

The local state of emergency was lifted on Oct. 10, 2023.

The province said the McDougall Creek fire was one of three wildfires collectively referred to as the 2023 Grouse Complex of wildfires, which also included the Clarke Creek and Walroy Lake wildfires.

It said the Grouse Complex was “one of the most destructive wildland-urban fire events the Okanagan region has ever experienced.”

The complex wildfire burned more than 150 square kilometres (15,076 hectares), resulting in a loss of 303 structures, with insurance costs exceeding $480 million. More than 30,000 people were evacuated from the area, the province said.

B.C.’s wildfires that year helped make 2023 one of the top 10 most expensive years for natural disaster insurance costs in Canadian history.

The Canadian Press contributed to this report.