I see guns come in that have been through fires at my shop, in fact, we have a load of them right now that are waiting to get worked on.
If the gun was in the fire itself, most likely it cannot be saved because of extensive damage to the metal. If the firearm was in a fire but never received any heat damage, just damage from water and smoke, the insurance company will pay us to refinish the firearm and the refinish the wood (or replace the stock if it's plastic). Customers usually bring us the firearms and we go over the guns with the customer to see which ones can and cannot be saved.
Same with water damage. If the firearm can be saved, we save it, we replace the rotted parts, we refinish the wood and we reblue the firearm back to its factory finish the best we can.
We try our very hardest to save as many guns as we can when they have been in fires and floods. I've seen guns come in with nothing more then just rust around the edges and damage to the wood while others (specifically an original Winchester '73) that was beyond repair because of the fire it had endured, the customer took it back, what he did with it, I'm not sure, but it wasn't destroyed.
Insurance companies have been good with us about this kind of stuff, mainly because we give them a pretty good quote before all the work starts.