Insurance companies in the United States are increasingly turning to aerial photographs taken by drones to evaluate and sometimes deny home insurance claims, according to a recent report by The Wall Street Journal (WSJ).
Major insurers such as State Farm and Allstate are narrowing down their coverage to only the safest properties, and they are leveraging aerial photography as a cost-effective method to support their decisions, as detailed in the WSJ report.
The scale of monitoring millions of homes across the country, estimated at 144 million according to the 2022 census, necessitated the establishment of the Geospatial Insurance Consortium. This organization claims its technology can deliver highly detailed imagery, including post-catastrophe visuals for areas affected by natural disasters.
Artificial intelligence plays a significant role in the services provided by the Geospatial Insurance Consortium, although the company doesn’t heavily advertise its AI usage. However, its collaboration with Vexcel, known for its AI-based analysis of aerial imagery, underscores the importance of AI in this domain.
Privacy concerns arise from the use of private drones capturing images across the US and elsewhere, alongside questions about the accuracy of such photographs. The WSJ highlighted a case where a California resident, Cindy Picos, had her insurance policy with CSAA Insurance terminated based on an aerial photo indicating roof damage. However, an independent inspection revealed the roof was still sound for another decade, yet CSAA Insurance upheld its decision.
Reports also suggest that insurers like Farmers Insurance have been dropping policies based on outdated or inaccurately analyzed aerial photos. Instances where shadows were mistaken for tree limbs exemplify the potential pitfalls of relying solely on drone imagery.
This trend raises ethical and practical concerns. While traditional in-person inspections may not be flawless, they offer a more reliable means of assessment, often with the homeowner’s consent.
Attempts to obtain comments from State Farm and Farmers Insurance regarding their use of aerial photography in policy evaluations were unsuccessful at the time of writing.
For insurance companies, the objective of minimizing risk exposure might incentivize the utilization of such methods, despite potential drawbacks. While regulations in many states aim to protect consumers from arbitrary policy denials, deficiencies such as inadequate roof maintenance can serve as legitimate grounds for termination, supported by questionable aerial imagery.
The prospect of being denied insurance coverage due to such practices underscores the importance of accurate assessment methods and regulatory oversight. In the meantime, homeowners may find themselves caught between rising premiums and the risk of being uninsured, prompting some to consider relocation as a remedy, albeit an impractical one.
