Insurers are using drones and aerial photography to inspect homes and deny coverage

When homeowner Linda Bennett opened the letter from her insurance, it wasn’t a bill — it was a $28,290 decision: replace your roof or lose coverage.

For Ms. Bennett, who has lived in her California home since 1993, the demand from State Farm was shocking.

“At first my thought was that it was a mistake. They have the wrong house because there is nothing wrong with my roof,” Bennett told local media.

What made the situation even more confusing, Bennett said, was that no inspector had ever visited the site or climbed onto the roof.

Instead, he believes the company surveyed the building remotely, perhaps with aerial photography or drone technology.

His experience reflects a growing trend in the insurance industry, where carriers are increasingly turning to high-tech tools to check homes higher – and Australia has not missed out.

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Drones, satellite imagery and artificial intelligence are now being used to analyze roofs and other exterior features as companies decide whether to renew policies.

State Farm told the New York Post that aerial photos are one of several tools it may use when reviewing a building.

“To assess the condition of the roof, we may use a combination of tools, including aerial photographs (from fixed-wing aircraft or satellites) and, in some cases, on-site inspections,” the company said in a statement.

Linda Bennett, who has lived in her Santa Ana home for decades, received a notice from State Farm warning that her roof must be replaced with approved materials or she could lose coverage — an upgrade she estimated would cost about $28,290 (US$20,000). Source: ABC7

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However, for Bennett, the clock is ticking.

He has until May 1 to resolve the matter, and says he has struggled to find another insurer willing to cover his home.

Another American homeowner, Lynne Schueler, found herself in a similar situation last year.

His insurer sent him an aerial photo of his property, taken without his knowledge, and issued an ultimatum: cut the tree limbs hanging from your roof in six weeks, or lose your home insurance.

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A Massachusetts homeowner says he was also surprised when his insurer used a stealth drone to photograph his property and then threatened to cancel it unless he cut down the tree branches. Source: New York Post

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“It was very offensive, because they had taken a picture of my house without my knowledge, which was really crazy,” Schueler told CBS News Boston.

The demand came with a price tag of $1832 – a huge expense.”

Drones are quietly rewriting Aussie property prices

For Australian homeowners, the results are clear.

As insurance providers use drone technology, property owners may find themselves under constant surveillance, with every overhanging branch or shifted roof tile potentially triggering an expensive alert.

Around the world, insurers are using aerial cameras to photograph individual homes, especially to inspect properties after extreme weather events such as hail or forest fires. However, a trend that concerns most property owners is the use of these images to determine which homes are considered too risky to insure.

News from early 2024 confirms that Australian insurance companies are increasingly using drones for asset inspections, including both routine inspections and comprehensive risk assessments.

The ‘eyes in the sky’ approach is not just about processing applications quickly; is reshaping the way homes are valued, insured, and even sold around the world.

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This can lead to policy modifications or even denials to homeowners whose properties exhibit conditions that are considered extremely dangerous, such as poorly maintained roofs or inadequate insulation.

The detailed, high-resolution imagery provided by drones offers insurers a safe and efficient way to assess damage following natural disasters such as forest fires or floods.

It also allows them to identify maintenance issues that may present a high risk profile.

For example, insurance company IAG launched the use of drones in 2016 to assess damage caused by devastating bushfires along the Great Ocean Road, greatly speeding up the process of assessing claims for affected customers.

Companies like Measure Australia are at the forefront of providing these data collection services to the insurance industry.

They create detailed 3D models of infrastructure, which are used to improve claims management, speed up compensation, and provide accurate documentation to reduce fraud. Measure Australia, through their website, highlights that their data can be used to assess the original condition of a building and its condition after a reported incident, providing an accurate and cost-effective way to assess damaged areas.

While insurers argue that aerial photography is less disruptive than regular home visits and helps them respond more quickly to disasters, the implications for Australia’s property market are profound.

Impact on property values ​​and affordability

If a property in Australia is deemed too risky to insure, or if its premiums are too expensive, its market value may drop.

This is especially true for homes in areas prone to natural disasters, such as areas prone to fires or floods.

As some insurers withdraw from high-risk regions or raise premiums sharply, it creates a two-tiered market where some properties become less attractive or unsellable due to insurance challenges.

Drone operator Will Andre launches a hexacopter camera drone as it flies over fire-ravaged houses in Winmalee, Blue Mountains, west of Sydney, in 2013.

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Transparency and consumer rights

The use of aerial photography raises important questions about transparency for Australian landlords.

Many are unaware that their locations are being photographed, and often do not have easy access to these images, which are used to make critical decisions about their policies.

What is happening in the US, where legislation is being proposed to mandate insurance notices and provide landlords with copies of these images, highlights the growing need for similar consumer protection in Australia.

Homeowners should have the right to challenge assessments based on photos that may be outdated or inaccurate, providing evidence of recent repairs or improvements.

Maintenance becomes a priority

The detailed analysis provided by drones means that seemingly minor maintenance issues, such as a few loose roof tiles or overgrown plants near a residence, can now be easily identified and flagged by Australian insurance companies.

This places a great burden on the house owners to maintain their buildings carefully, not only for reasons of beauty, but because of reliability.

A poorly maintained home can directly translate into higher premiums or even refusal to insure, affecting its desirability in the market.

Finally, the ‘eyes in the sky’ are here to stay.

For Australian homeowners and those looking to enter the property market, understanding the implications of this aerial surveillance is no longer optional.

It is an important factor that will increasingly affect property values, insurance costs, and the affordability of home ownership in certain areas across our great continent.