Midway through December, tech entrepreneur Dan Preston debuted insurance startup Stand’s first product focused on protecting property in wildfire zones. He should have had months to work with prospective customers and to market the offering before any catastrophic fires hit the U.S.

In California, Stand’s home state, fire season normally lasts from early summer through October or November. Stand, which Preston co-founded early last year, announced a $30 million financing round and the new product on Dec. 16, a few days before the official start of winter.

But it’s been a winter like no other. Three weeks after Stand’s launch, wildfires ravaged parts of Los Angeles, killing more than two-dozen people, scorching about 41,000 acres due to extreme winds and destroying at least 12,300 structures.

“This is certainly not a time you would normally see events like this,” Preston said in an interview this week. “It has put an accelerant on business in a pretty massive way. As soon as this stuff started happening, the inbound demand was about 5-10x overnight.”

Preston has been trying to innovate within the typically boring and slow-moving insurance industry for well over a decade. In 2013, he became technology chief at auto insurance upstart Metromile, and later took on the role of CEO, guiding the company into the public market in 2020 through a special purpose acquisition company (SPAC). Metromile hit a rough patch after its SPAC and sold to tech-powered insurer Lemonade in 2022. Preston stayed on at Lemonade for another year.

At Stand, Preston is aiming to go big in a market that legacy insurers are rapidly abandoning because it’s viewed as too risky. As of mid-2024, at least eight insurance carriers had left the state or limited their exposure. The California FAIR Plan, generally viewed as an insurer of last resort, had seen a 137% increase since 2019, and that was well before the latest LA fires began. According to LendingTree, about 10% of homes in Los Angeles are uninsured.

It’s not a surprise that firms are exiting the state. Goldman Sachs estimates that insurers could face up to $30 billion in losses tied to the LA. fires.

Through a combination of technology and a reimagining of home insurance, Preston wants to offer reasonably priced protection to homeowners in wildfire zones.

For property owners, the key piece is recognizing that they have to make changes to their homes and the surrounding land so that fires are less likely to spread out of control. That could include pruning trees, replacing wood fencing with steel or adding concrete barriers between homes. Stand uses artificial intelligence and what it calls “physics-driven insights tailored to each property” to make specific mitigation recommendations that can make a property insurable.

Preston said the company, which currently has 13 employees, has only insured a few properties so far, but is in talks with hundreds of potential customers. That number is increasing dramatically, he said, as property owners start to understand the consequences of the LA fires.

“It will be a lot harder for folks to find insurance the next couple years because of this event,” Preston said. “In some ways, we have have a responsibility to level up our ambitions, bringing insurance back to the market.”

Bill Clerico, one of Stand’s co-founders and initial investors, was expecting a busy January, but for very different reasons. He and his wife just had their second child. And on Jan. 7, Clerico’s fire-tech focused venture firm, Convective Capital, filed to raise $75 million for its second fund.

Clerico said he can’t talk about Convective’s fundraising at the moment, but he is using the disaster to try to raise awareness about strategies for wildfire mitigation and some of the tools and technologies that are available. In a post on X on Jan. 8, Clerico wrote that four keys to dealing with wildfires are forest and fuel management, rapid detection using cameras and satellites, “hardening” of homes and communities, and reducing fires caused by utilities.

“The bottlenecks are mostly around adoption and deployment — a lot of these technologies are not cutting-edge stuff,” Clerico said in an interview. “Drones have existed for decades, satellites for decades. It’s cameras and software, which found its way into every aspect of society expect public safety.”

Before launching Convective three years ago, Clerico was co-founder and CEO of fintech startup WePay, which he sold to JPMorgan Chase in 2017. He then spent over three year’s as a managing director for the bank in the Bay Area,

Clerico lives in San Francisco and has a cabin in Anderson Valley, about 115 miles north of the city. He said that a wildfire there in 2018 inspired him to volunteer at the local fire department and was a factor in leading him to start investing in the space.

While VCs have poured into clean tech in recent years, they’ve mostly avoided investing in companies focused on resiliency and adaptation, in large part because the buyers are “pretty large slow-moving institutions, like utilities, government and insurance,” he said.

Clerico said that what’s unique about Stand relative to other tech startups that have tried to crack insurance is that competition in its target market is dwindling rather than increasing.

“Existing insurers don’t compete, they’re exiting,” Clerico said. “if you can have better informed view on risk, it’s a much more favorable place for a startups.”

Still, it’s an extremely tough market.

Stand is currently focused on homes that are worth $2 million to $10 million, which Preston said covers properties facing a lot of “distress.” The company is working with a number of reinsurers and expects to be able to bring costs down as it proves the model can work.

But making a meaningful contribution to the bigger problem will require significant behavioral and structural changes in neighborhoods that, like Pacific Palisades in LA, are suddenly at risk of almost disappearing overnight. The mission has to go well beyond protecting individual homes one at a time.

“We might be able to play a much larger role in the state of safety if we can work with neighborhoods, and require homeowners and city officials to design neighborhoods to be more resilient,” Preston said.

WATCH: Rebuilding LA is most pressing issue when fires recede

As Los Angeles continues to battle wildfires that have destroyed parts of the city and killed at least 24 people, companies are pledging millions in donations to aid in relief efforts.

On Monday, Netflix and Comcast each announced $10 million donations, split between groups such as the Los Angeles Fire Department Foundation, World Central Kitchen and the American Red Cross. Both companies also said they are assisting employees directly impacted by the fires.

“The next few years will be a rebuilding time for many of us and it will require creativity, vision, grit and perseverance. Looking around at some of the hardest hit neighborhoods, it is hard to imagine rebuilding — but we will, and we will come back stronger than before,” Netflix co-CEO Ted Sarandos wrote.

Comcast is the parent company of NBCUniversal, which has a big footprint in Los Angeles with its studios.

“We extend our deep appreciation to the first responders for their tireless and courageous efforts,” Comcast Chairman and CEO Brian Roberts said in the announcement.

Other media and entertainment corporations, many of which have prominent presences in the Los Angeles area, had previously pledged to donate to relief efforts. The Walt Disney Company announced Saturday that it was committing $15 million to fire response and rebuilding. Fox News reported that its parent company, Fox Corporation, donated $1 million to the American Red Cross.

Gambling platform FanDuel and its parent company, Flutter Entertainment, donated $250,000 to disaster relief organization Americares and the LA Fire Department Foundation, they announced.

The NFL — which relocated a playoff game from SoFi Stadium in a suburb of Los Angeles to State Farm Stadium in Glendale, Arizona, due to the fires — said its teams and ownership groups were providing a collective $5 million to relief efforts. Twelve Los Angeles sports teams, including the Lakers and the Dodgers, separately announced a donation of over $8 million to fire relief groups.

Grocers Kroger and Walmart pledged $1 million and $2.5 million, respectively, toward relief efforts. Health insurer Anthem Blue Cross announced a $10 million donation.

Reuters reported Monday that JPMorgan Chase and Bank of America are also providing some payment relief to mortgage customers affected by the wildfires.

Hollywood stars and entertainment figures have also said they are financially supporting fire relief.

Actor Jamie Lee Curtis, a Los Angeles resident, announced on Instagram that her family pledged $1 million to relief funds, while singer Beyoncé’s BeyGood Foundation committed $2.5 million to its own fire relief fund. Socialite Paris Hilton said she would launch an emergency fund to assist displaced families and committed $200,000 to it, while actor Halle Berry said she donated clothes to victims of the fires.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

Airlines have extended travel waivers for Los Angeles airports as wildfires continue to burn in the area.

American Airlines, United Airlines, Southwest Airlines, JetBlue Airways and other carriers that serve the area have waived fees for flight changes for travelers booked to Los Angeles while the city grapples with power outages, water shortages and conservation, as well as the outright damage of more than 10,000 homes and other structures.

On Friday, the area’s airports were operating normally, according to flight-tracking platform FlightAware, but parts of the city were still in the grip of the wildfires. Power outages were reported across Los Angeles County and local residents in the decimated Pacific Palisades area were told to boil or use bottled water. Parts of the county were also still under evacuation orders as firefighters sought to contain the fires.

American Airlines on Friday said travelers booked to or from Hollywood Burbank Airport, Los Angeles International Airport, Ontario International Airport and John Wayne Airport, which serves Orange County, can rebook without paying a change fee or fare difference if they can fly as late as Jan. 20.

Southwest said the wildfires could affect service to those airports and that customers can rebook within 14 days of their original travel dates without additional charges. It said customers could also change their trips to other California cities: Palm Springs, Santa Barbara and San Diego.

Meanwhile, a Delta Air Lines executive on Friday said sales of flights to Los Angeles, one of the carrier’s busiest hubs and a generator of high-value business and leisure travel, have declined.

“We monitor sales on a daily basis by geographic region, and we have seen a decline in sales, not a wholesale reduction or an uptick in cancellations, but a decline in sales during this period,” Delta’s president, Glen Hauenstein, said on an earnings call, in which the airline also said it had otherwise strong travel demand across its network. “As soon as the period ends, we can probably put a wrapper around how much we thought that cost us. But I don’t think it’s going to be significant to the quarter, hopefully not.”

Hauenstein said, however, that there is often an uptick in demand after natural disasters because of rebuilding.

“Our hearts go out to everybody in Los Angeles affected by this,” he said. “But from a long-term airline perspective, we faced hurricanes, we faced flooding, we faced all that. And usually, the impacts are in the beginning phases, followed by a recovery phase.”

Insurers exposed to the California homeowners’ market sold off sharply Friday as the devastation caused by the Los Angeles wildfires spread.

Shares of Allstate and Chubb both declined 4% in morning trading, while AIG and Travelers fell about 2% each. These four stocks were among the biggest losers in the S&P 500 Friday morning.

AllState, Chubb and Travelers are the most exposed carriers to insured losses in the wildfires, according to JPMorgan. The Wall Street firm noted that Chubb could have a particularly high exposure due to its high-net-worth focus in the region.

The destructive fires this week could become the most costly in California history. The insured losses from this week’s fires may exceed $20 billion, and the estimate could be even higher if fires spread, the JPMorgan estimated Thursday. Those losses would far surpass the $12.5 billion in insured damages from the 2018 Camp Fire, which was the costliest blaze in the nation’s history, according to data from Aon.

Moody’s Ratings expected insured losses to run well into billions of dollars given the area’s high values of homes and businesses in the affected areas.

The Palisades Fire is the largest of the five blazes. It has burned more than 17,000 acres, destroying over 1,000 structures, according to California authorities. Pacific Palisades is an affluent area where the median home price is more than $3 million, according to JPMorgan.

Insurance companies have asked Southern California Edison to preserve evidence related to the devastating wildfires that have swept Los Angeles, according to a company filing to regulators.

Certain reinsurers were also affected. Arch Capital Group and RenaissanceRe Holdings declined 2% and 1.5% Friday, respectively. JPMorgan believes that rising loss estimates increase the likelihood of reinsurance attachments at various insurers being breached.

— CNBC’s Spencer Kimball contributed reporting.