US insurers use drone photos to deny home insurance policies
- Reference: 1712608208
- News link: https://www.theregister.co.uk/2024/04/08/us_insurers_drones/
- Source link:
Mega-insurers including State Farm and Allstate are [1]dropping all but the safest properties, and aerial photography is the cheap and easy way to justify it, [2]a WSJ report claims.
It would be a big task for just a single company to keep track of the 144 million homes that existed in America as of the 2022 census, which is why the [3]Geospatial Insurance Consortium was founded. It boasts that the firm's kit can provide "stunningly clear imagery" and can even provide "post-catastrophic imagery" for areas impacted by increasingly common natural disasters.
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Unsurprisingly, artificial intelligence is a big part of GIC's services. Although the biz doesn't emphasize its usage of AI, it does brag about its partnership with Vexcel, which in turn brags about its AI-based analysis of aerial imagery.
[5]
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Privacy is an obvious concern in respect to private drones canvassing the US and other countries, but so is the accuracy of these photographs. The WSJ cited the case of California resident Cindy Picos, who was dropped by her provider CSAA Insurance based on an aerial photograph that apparently indicated her roof was on its last legs. An independent, in-person inspection found that the roof would last for another 10 years, but CSAA Insurance didn't change its mind.
Dropping insurance policies like it's hot
Nichole Brink, an insurance industry worker, said that her former employer Farmers Insurance used aerial photos to drop claims for almost any reason, from moss on the side of houses to tree branches seemingly hanging above roofs.
Perhaps even more concerning was that some photos were over two years old, leading Farmers to drop policies based on out of date info. Even in up-to-date photos, improper analysis (done by humans or AI) could lead to policies being dropped. In one case, Farmers mistook shadows for tree limbs, it's reported.
[7]Is it a bird? Is it a plane? No, it's a terrible leak of drone buyers' data
[8]In the West, we're worried about shooting down drones. In Russia, drones shoot you
[9]Swiss drone-busting eagle squadron grounded permanently
[10]Fire-resistant drones promise to help rescuers in a hot spot
In the pursuit of processing insurance applications and renewals on the cheap, insurance companies seem to be going for the worst of both worlds: inaccurate and invasive. While in-person inspections of homes aren't perfect, they're far more likely to result in accurate assessments. Not to mention the fact that they're much more consensual than a drone that doesn't need to ask anyone for permission.
We've asked State Farm and Farmers Insurance for comment about using aerial photography to ascertain insurance policies, though at the time of writing they have not responded.
However, if the goal of insurance companies is to drop as many customers as possible, then this method seems to be pretty good. Many states don't allow insurance companies to deny coverage except for certain reasons, which is supposed to protect consumers. Failing to meet requirements like maintaining a roof is one of those reasons, and shoddy aerial photos can provide the grounds needed to drop customers.
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It's bad enough to have to pay a higher premium on an insurance policy, but not being able to get any at all is even worse. Thankfully, there's a simple solution: just move somewhere that never experiences any natural disasters ever. ®
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[1] https://www.cbsnews.com/news/state-farm-california-homeowners-coverage-wont-renew-72000-homes-apartments/
[2] https://www.wsj.com/real-estate/home-insurance-aerial-images-37a18b16
[3] https://gic.org/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZhRo@okOFE-d7Tbaotll3AAAAIQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZhRo@okOFE-d7Tbaotll3AAAAIQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZhRo@okOFE-d7Tbaotll3AAAAIQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2018/04/06/dronesforless_data_breach/
[8] https://www.theregister.com/2019/03/30/russia_shotguns_drone/
[9] https://www.theregister.com/2022/11/08/swiss_dronebusting_eagle_sqaudron_grounded/
[10] https://www.theregister.com/2023/06/28/fire_resistant_drones/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZhRo@okOFE-d7Tbaotll3AAAAIQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://whitepapers.theregister.com/
Re: A physical visit is a lot more reliable
But insurance is a game of playing the odds.
This particular 17 year old driving a Ferrari might be a super safe driver who only over drives it out of the garage to wash it and perform careful maintenance - but the prejudiced insurance company is likely to run off screaming into the distance at a speed that only a Ferrari could keep up with
As usual, it's cover for taking advantage of old people
Some friends of mine in the San Fernando valley got a nasty-gram from their insurance company about their roof. It appears the trigger was storm debris from the neighbors trees and the ones on the street that are the cities responsibility to maintain.
They are too old to be climbing on roofs themselves, so I head over from time to time and toss the big stuff over the sides and clear the gutters. This year has seen plenty of storms, so unlike most years where it stays clear for a while I had to make a few trips this time. The insurance company claimed they were going to cancel the policy because the roof was neglected, but didn't actually spell out the criteria or how often they expected it to be cleared. It was just cover to force a new policy to be issued, at a higher rate.
They are trying to bounce established low risk and low profit customers as well as higher risk properties, and trying to force policy churn so they can drive up rates.
This is why the regulators need to run the show with a tighter hand, especially when it comes to using third parties to collect and process data like this. Consumers have no real transparency about where, how and why there data is being used or their privacy is being impacted. Google got themselves into trouble capturing high res photos of peoples private spaces, and their attempts to blur out the resulting edge cases were a years long saga and only mostly successful. Admitting they are spying on people properties just opened the can of worms.
Re: As usual, it's cover for taking advantage of old people
In my part of the US, roofs are a big thing for insurance companies. They don't want to buy someone a new roof after a storm if the old one was beat up and already needed to be replaced. Also, water intrusion and mold can be very expensive to repair. Just as COVID was starting Farmer's told me I had 30 days to put on a new roof or they were not going to renew my policy. They eventually backed off of that, due to COVID, but since my roof was over 10 years old I had no choice but to replace it before the next year's renewal.
One thing I learned from dealing with them is that paying extra for materials that are warranted for 20 or 30 years is pointless. As a home owner you need to be budgeting for 10 year replacement. ($2 per sq/ft minimum per year) That way, when the insurance company shows up with their demands for replacement you'll already have money in the bank to do it. Replacing a roof is very expensive. In this area, due to it being a hail zone, codes don't allow overlays. So a new roof means tearing off the old asphalt shingles and replacing. Adding thousands of $$$ to the repair.
Something else I suspect is that once they know the true age of your roof, they'll track that and automatically send out denial letters when you cross the 10 year mark. True condition of the roof doesn't matter. So make sure you document when you put on a new roof. Because "I don't know" means "too old" to them.
Re: As usual, it's cover for taking advantage of old people
What the actual shit. For a country obsessed with freedom, there seems to be precious little. Awful bullshit masquerading as capitalism.
Still, this opens an opportunity for an enterprising startup to insure people who DO secure their properties. Tech returns have gone to shit, investors, get into insurance! Make people buy 30 year roofs, charge half the premium, word will spread fast.
Re: As usual, it's cover for taking advantage of old people
As a home owner you need to be budgeting for 10 year replacement.
I don't get this. My parents' house has the same roof tiles as when it got built in 1978... I don't think I've ever seen somebody replace a roof, unless the whole building gets renovated.
A physical visit is a lot more reliable
I've lived on the gulf coast in America for years, you could easily have a roof that "looks" perfect but when a hurricane goes by, if the roof is not well secured to the house then it could be blown away a mile to two when the wind speed is running 180 mph or faster. But a high wind speed like that might secure the roof by dropping a few large trees on it ... or in it. So a drone picture could look good, but a physical inspection is a lot more reliable.
A heavy physical construction can maintain the house - I had a friend in Florida who lived in a small housing group when a hurricane arrived - her house was completely OK with minimal damage but every other house, around her house, was completely blown away - after the hurricane a drone picture showed her house and the concrete floors all around with no houses at all. So I was happy for her.