Insurers are fleeing California due to wildfires. But this startup plans to work with the riskiest homes

As wildfires get bigger and more destructive in California, more insurance companies are pulling out of the state—or sharply limiting the number of policies they’re willing to carry. But a new startup called Stand just launched with a deliberate focus on homes at risk of fire.

Stand is “focused on properties that are exposed to climate-impacted risks,” says CEO and cofounder Dan Preston. The startup will eventually also include homes at risk of flooding and damage from storms. But it’s starting with the challenge of wildfire in a state where more than a million acres burned this year and hundreds of thousands of people have been abandoned by their insurers.

The current approach to insurance no longer works in the age of climate change, Preston argues. “We think that the traditional way of doing insurance, which is to take the last 10 years of what we’ve seen and then price that for the next 10 years, is not actually going to work when the number of these wildfires or wind storms are growing very rapidly and causing a lot of uncertainty,” he says. “The only way to really solve this problem is to directly intervene and work with property owners to actually make the properties themselves safer.”

Some other insurers already offer discounts if homeowners in fire zones take certain steps like cutting down trees close to their house. But Stand goes farther, using AI modeling to see exactly how a fire is likely to burn on a specific property. (The company aims to insure anyone who implements their mitigation recommendations.)

The results are detailed. For example, the model looks at the species of trees in the yard, and how hot each type of tree might get if it burns. Then it might recommend replacing a particular tree, or replacing one or two windows with stronger glass near that tree. The company can also look at the impact of newer interventions like certain types of sprinkler systems that haven’t been on the market long, but that the physics-based modeling can evaluate without years of real-world testing. (The company aims to be able to insure almost any property in its initial target range—those that are too valuable to be fully covered by the state’s last-resort FAIR plan—as long as homeowners make necessary changes.)

Other insurers make more general recommendations, and might suggest that someone cut down most of the vegetation around their house, leaving the yard barren. Because Stand’s modeling is more precise, it means that people can make fewer changes and still make their property more resilient.

Seeing how their own home could burn also helps motivate homeowners to act. “I think one of the most frustrating things for homeowners right now is that insurers will ask for all of these really onerous changes and then they’ll get dropped at the end,” says Preston. “What this technology allows us to do is actually create a connection to the ‘why’: what actually is going to change when I have to cut down this tree or I have to replace this window. By showing that with like a physics simulation, I think it really helps to illustrate why the changes are actually helpful to them.”

Preston, who previously led a pay-per-mile car insurance company called Metromile, became interested in how to fill the gap for insurance in areas facing the biggest climate impacts. But he also realized that insurance could be a powerful tool to incentivize people to adapt and ultimately become more resilient.

The same type of modeling could also help cities make larger community-scale changes to help reduce risk. Eventually, Stand plans to work both with homeowners and communities. “The goal is to, through the mechanism of insurance, drive billions of dollars of investment into adaptation technology and prevention,” Preston says. “I think you can do that once you get some scale and you demonstrate the technology works.”

The startup announced today that it raised $30 million in funding from Inspired Capital, Lowercarbon, Equal Ventures, and from Convective Capital, a VC firm focused specifically on wildfire tech. Stand expects to write more than $2 billion in home coverage within its first year.