April 9th 2024.
A recent article published by The Wall Street Journal has brought to light a concerning practice by some insurance companies - using drone footage to deny homeowners insurance coverage. According to reports, several homeowners have come forward claiming that the images used by their insurer to justify the cancellation of their coverage are not only inaccurate but also outdated.
One such homeowner is Cindy Pecos, a resident of California, who shared her experience with Business Insider. Despite conducting her own investigation and providing evidence that countered the company's claims, her insurer went ahead and dropped her based on the drone footage they had on file. It seems that even though the images captured by these drones may not always be reliable, insurance companies are increasingly relying on them, along with planes and high-altitude balloons, to review and deny coverage to policyholders across the country.
In 2023, CJ Sveen, another homeowner, received a similar letter from his insurance company informing him that his policy was being canceled due to hazards in his yard. However, when he tried to access the images that were used as evidence, he was denied. After contacting his insurer, he was shocked to learn that they had sent a drone to his property without his knowledge or consent. As Sveen put it, "I guess the old-school way would be to knock on your door; I guess they don't do that anymore, they send a drone."
When ABC 7 reached out to the California State Automobile Association Insurance Group for a comment, they denied using drones but admitted to using "proprietary aerial imagery" captured by fixed-wing airplanes or satellites. They also suggested that homeowners could use services like Google Earth 3D to get an idea of what the insurance companies are looking at when making decisions about their policies.
Further investigation by WHEC revealed that insurance companies are purchasing these aerial images from third parties in order to mitigate any risk of having to pay out claims. Rhett VanScoter, an insurance agent, confirmed this practice and justified it by saying that insurance companies have been losing money on homeowner's insurance in recent years and are trying to find ways to become profitable again.
While this may seem like a reasonable explanation, it's concerning that homeowners are not being informed or given the opportunity to address any issues before their policies are canceled. As a result, many families have been left without insurance coverage, as seen in the case of an Atlanta HOA that failed to pay insurance money to 18 families who were displaced by a fire. It's clear that there needs to be more transparency and accountability when it comes to the use of aerial imagery by insurance companies, as it directly impacts the lives and homes of their policyholders.
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