The wood is probably fine. If it got wet the moisture got on the outside of the wood, it's not the same as getting in the cell structure. Sticker it and it will probably be fine in a few days.
The top few boards may have gotten scorched enough that they are no good, and you may need to cut a few inches off the side and ends.
Not sure of how your insurance works where you are. I went through this about 15 years ago when my garage burnt down (where some wood was stored). My insurance company wrote it off and gave me value from the local hardwood dealer. They offered to have their company replace the building and lost items. I opted for the check and handled it all my self.
While cleaning up I found that almost all of the lumber was fine. I just had to cut the ends off.
Double check everything on the insurance list. By the time I got done adding light bulbs, scraps of rope, rags, 2x4 cut offs, and items like that they increased my check by about $2500. You are to be made whole, so if you needed to cut up a 2x4 into 8, 1' pieces to have your scraps back, they need to provide it.
The insurance company's job is to low ball you. and what they are sending you is an offer. No matter what ask for more. Tell them you will not accept final payment until you have a final bill. Whose going to pay for moving your stuff out of your shop so it can be painted? Whose going to clean the rust off your tools? Is the tool still good? or did the heat cause the grease to seep out of the bearings etc.?
I would push for new tools, or a guarantee from the insurance company that they will pay for future repairs.
Having gone through this I can tell you your insurance company will be fine.
