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While traditional insurance companies are pulling out of markets, a new insurance startup is using simulation software to better predict risk and insure multimillion-dollar homes in areas vulnerable to natural disasters, The Wall Street Journal reports.
Stand is a new insurance startup that seeks to cover homes in areas other insurers are abandoning, with company executives saying its simulation software allows the company to better predict risk and identify improvements homeowners should make to increase resiliency.
The software simulates the physical effects of a disaster on a home and to identify changes a homeowner should make to decrease risks. The goal is to find targeted alterations that don’t turn a home into a bunker or require clearing all trees on a property, for example, says Dan Preston, the company’s co-founder and chief executive.
“Traditional ways to price insurance don’t work in an environment that’s so unpredictable,” Preston says, referring to climate risks.
Launched this winter, the company is currently only covering California, but it plans to expand to other states and other types of catastrophe insurance, such as wind and convective storms and floods. Stand is focusing on homes valued at $2 million to $10 million.
Although venture funding for insurance startups has dwindled, Stand has raised $30 million in Series A financing led by Lowercarbon Capital and Inspired Capital, with participation by Equal Ventures and Convective Capital.
