(Airdate: 2024-04-29) CBS - KFMB - How insurance companies use drone images to drop policies

Published Date: 04/29/2024

Eyes in the Sky: How Insurance Companies Are Using Drones to Decide Your Home’s Fate

Homeowners across California are discovering a new twist in their insurance renewal process — one that’s taking place hundreds of feet above their homes.

In a recent CBS 8 (KFMB San Diego) report, anchor Marcella Lee and reporter Shannon Handy revealed that major insurers are now using drones and satellite imagery to inspect properties before deciding whether to renew, cancel, or adjust coverage.

It’s part of a growing trend reshaping how insurers manage risk in a state already struggling through an insurance availability crisis.

“The practice of looking at homes and properties before renewal isn’t new,” insurance expert Karl Susman explained. “What’s new is the way they’re doing it — and it feels a little bit creepy.”

1. From Clipboards to Cloud Tech

In the past, homeowners might see a field inspector visit their property once every few years, clipboard in hand, snapping photos of the roof and yard. Those days are over.

Now, insurers are increasingly relying on aerial imagery, collected via drones, planes, and high-resolution satellites, to assess risk automatically — and sometimes, to justify non-renewals or premium increases.

“In San Diego, companies are now using drones and other technology to survey your property before deciding whether to insure it or not,” Handy reported.

The change reflects a wider industry pivot toward AI-driven underwriting and remote inspections — technologies once used only for catastrophe modeling or claims verification that are now applied to everyday renewals.

2. “It Feels a Little Bit Awkward”

For many homeowners, the idea that insurers are quietly capturing drone or satellite photos of their property can feel invasive.

“It’s just the idea — it feels a little awkward, a little weird, a little strange to not know when it’s happening,” Susman admitted.

That discomfort isn’t unfounded. The technology allows insurers to detect details homeowners may never notice — things like a missing roof tile, an overgrown tree branch, or debris in the yard — and flag them as potential hazards.

In one reported case, a CBS 8 employee received a notice that satellite images showed moss on their roof, with a warning that their policy could be canceled if the issue wasn’t fixed.

Another homeowner said drone imagery captured a drained swimming pool, which was later cited as a maintenance issue during renewal review.

3. Deferred Maintenance: The New Red Flag

At the core of this shift is a concept called deferred maintenance — the industry term for any visible deterioration or neglect that could increase the risk of a claim.

Susman explained that insurers are now scanning for exactly those issues:

“What we’re seeing is companies that are, at renewal, going and looking at the risks they already insure to determine if there’s what’s called deferred maintenance — for example, roof wear, drainage issues, or yard debris.”

Under current California regulations, the process is binary — if an insurer spots a problem, they can require immediate repair or drop the policy entirely.

“Right now, it’s all or nothing,” Susman said. “You must have it fixed, or you can’t have the policy.”

That means even minor findings — like cracked shingles, a cluttered side yard, or tree branches touching the roof — can lead to non-renewal notices if not addressed quickly.

4. The Consumer Backlash

Consumer advocates say they’ve seen a sharp increase in complaints from homeowners blindsided by these surveillance-based evaluations.

A spokesperson for the nonprofit United Policyholders told CBS 8 the organization has received “a dramatic increase in reports” from consumers whose policies were dropped based on drone or satellite imagery.

In many cases, homeowners only learned after the fact that such imagery had been used.

“The practice itself isn’t new,” the spokesperson said. “But the sheer scale — and the fact that many homeowners aren’t even aware it’s happening — raises serious questions about transparency.”

Advocates argue that insurers should be required to disclose when they use aerial imagery for underwriting decisions, and to give homeowners a fair chance to dispute or correct the findings.

5. Why Now? Preparing for Regulatory Change

Susman says the timing of this widespread shift to drone inspections isn’t coincidental.

With California’s Sustainable Insurance Strategy set to take effect later this year — a reform that will finally allow insurers to use forward-looking catastrophe models and offer discounts for mitigation work — many carriers are gearing up for a new era of underwriting flexibility.

“More than anything,” Susman explained, “they’re gearing up for home insurance regulations to change by the end of the year, which will allow them to offer underwriting discounts.”

In other words, insurers are gathering data now so they’ll be ready to reward homeowners who invest in risk reduction once the new rules go live.

“The only difference,” he said, “is that right now it’s all or nothing — fix the issue or lose coverage. With the new regulations, you’ll have a choice: pay more by not fixing your roof, or get a discount for having a new one.”

6. Data-Driven Discounts: The Future of Home Insurance

The move toward aerial risk assessments isn’t all bad news. Under the upcoming reforms, insurers will have the flexibility to offer graduated pricing models that reflect a home’s individual risk level — not just its ZIP code.

That means homeowners could eventually earn premium discounts for visible mitigation improvements such as:

• Installing Class A fire-resistant roofing
• Maintaining defensible space around structures
• Clearing debris and vegetation from gutters and yards
• Upgrading drainage and downspouts
• Using ember-resistant vents or screened soffits

Susman believes this is the direction the industry must go.

“The overall goal of this practice is to not have a claim,” he said. “Insurance companies are letting go of more and more customers because they can’t afford the risk. Prevention is the only sustainable solution.”

7. What Homeowners Can Do Right Now

For Californians worried about being targeted by these new inspections, experts offer several proactive steps:

✅ 1. Maintain Your Roof and Yard

Check your roof regularly for moss, missing shingles, or damage — these are the top triggers for non-renewal. Clear debris and overgrown vegetation that could signal neglect.

✅ 2. Document Your Maintenance

Take photos before and after major maintenance or cleaning projects. Keep digital records showing that you’ve addressed potential issues before renewal time.

✅ 3. Check Your Policy Notices

If your insurer flags an issue, don’t delay. Fix it and send documentation. Once a notice is issued, there’s rarely an appeal process.

✅ 4. Talk to Your Agent or Broker

Agents can sometimes negotiate extensions or clarify misunderstandings. Independent brokers can also explore other carriers or specialty markets if your current insurer won’t renew.

✅ 5. Prepare for a New Kind of Inspection

Expect drone and satellite assessments to become standard. Transparency laws may catch up eventually, but for now, assume your home may be viewed from above during every renewal cycle.

8. The Privacy Question

As technology becomes central to underwriting, privacy concerns are likely to intensify.

While aerial imagery captured from public airspace is legal, many homeowners feel the practice blurs ethical boundaries — especially when imagery is gathered or analyzed without notice.

The balance between innovation and privacy will likely become a key policy issue as the state continues modernizing its insurance framework.

“I get it — it feels a little bit creepy,” Susman acknowledged. “But ultimately, the goal is to prevent loss. It’s not personal; it’s predictive.”

Still, regulators and consumer groups are pushing for clearer rules requiring insurers to disclose when and how they collect this data — and to ensure the information is used fairly.

9. A Glimpse Into the Future

This isn’t just a California phenomenon. Across the country, insurers are adopting geospatial analytics to evaluate everything from wildfire exposure to roof aging and flood risk.

AI systems can now analyze millions of homes in seconds, flagging those most likely to generate future claims.

For better or worse, this is becoming the new normal — a future where algorithms and aerial images replace human inspectors and risk assessments happen in real time.

“It’s just a question of how it’s implemented,” Susman said. “Once the new regulations are in place, we’ll see whether these tools are used to penalize or to reward.”

10. The Bottom Line

The rise of drone and satellite inspections marks a turning point for homeowners insurance in California.

While it raises valid privacy and fairness concerns, it also hints at a more data-driven — and potentially more efficient — future.

For now, the best defense is proactive maintenance and communication.

If your insurer points out an issue, fix it quickly and document your compliance. If you receive a non-renewal notice, contact your agent immediately.

“It’s your best bet to just get it fixed right away,” Susman told CBS 8. “Because right now, carriers don’t have the option to underwrite based on conditions — it’s all or nothing until the new regulations come out.”

As California works to rebuild a sustainable insurance market, this kind of technology will only become more common. The challenge ahead will be ensuring that innovation serves consumers as much as it serves the bottom line.