Karl Susman's Comments at Summer 2024 National Council of Insurance Legislators Summer Meeting

Published Date: 08/21/2024

Rethinking Insurance Inspections: Karl Susman’s Call for Transparency, Technology, and Consumer Trust

The insurance industry stands at a technological crossroads. New tools—satellite imaging, drones, AI-powered risk modeling, and digital self-inspections—have the potential to revolutionize how insurers evaluate properties. Yet, instead of ushering in a golden era of efficiency and transparency, many consumers today feel blindsided, frustrated, and even violated by how these innovations are being used.

That tension took center stage at the Summer 2024 National Council of Insurance Legislators (NCOIL) Meeting, where insurance expert, agency owner, and radio host Karl Susman delivered candid remarks about the state of inspections, consumer perception, and the urgent need for clear regulatory guidelines.

Susman’s insights offered an unfiltered look at what’s happening “on the ground”—from the everyday frustrations of homeowners to the systemic communication breakdowns between carriers, regulators, and agents. His message was simple but powerful: technology isn’t the enemy—poor rollout and lack of transparency are.

Inspections Aren’t New—But the Process Has Changed

Susman began by grounding the discussion in history. Inspections, he reminded the audience, have always been part of insurance underwriting.

“When an insurance company is insuring a property, they’re going to look at the property. That’s just part of the process,” he said.

Decades ago, inspections were often handled by agents themselves. Susman recalled walking around homes with a “little wheelie thing,” measuring perimeters by hand.

“Consumers didn’t love it,” he admitted. “But at least they knew who was coming to their house and why.”

As insurers grew larger and more centralized, those tasks shifted to in-house staff and later to third-party vendors. Each step added a layer of distance between the insurer and the policyholder—and with that, a growing sense of mistrust.

“When the insurance company started sending their own people, consumers didn’t like that either. They figured, ‘This guy’s on the insurance company’s payroll; he’s going to look for every little thing.’ So the industry pivoted again and started hiring third-party inspectors.”

The result? Sometimes, chaos.

Susman shared stories of inspectors showing up unannounced, sending cryptic text messages, or being chased off properties by homeowners with firearms.

“It’s definitely a difficult job for inspectors,” he said, “but it’s also invasive for consumers. You’ve got strangers showing up with no clear explanation of who they are or what they’re doing. It’s not a good experience for anyone.”

The Rise (and Fall) of Self-Inspections

To fix those problems, some carriers introduced self-inspections—letting homeowners use their smartphones to take photos or videos of their property via an app or web portal.

On paper, it seemed like a win-win: no strangers at the door, no privacy concerns, and lower inspection costs for insurers. But as Susman pointed out, reality was more complicated.

“Consumers are smart,” he said with a smile. “If there’s an area that doesn’t look so good, it just might not show in that picture.”

Self-inspections, while efficient, lacked oversight and consistency. When later inspections—often by aerial or drone imagery—revealed discrepancies, carriers questioned why visible risks hadn’t been reported earlier.

“All of a sudden there were things that were clearly there years ago that they were just now finding,” Susman said. “The industry is still working on self-inspections, but compliance and accuracy are real challenges.”

Enter the Era of Aerial and Satellite Inspections

From Google Maps to drone flyovers, insurers now have access to near-constant streams of visual data on insured properties. In theory, this technology can enhance underwriting accuracy, prevent losses, and reduce fraud. But according to Susman, the rollout has been a “disaster.”

“The industry failed horrifically in rolling this technology out,” he said bluntly. “Number one, they didn’t tell anybody about it.”

Many agents, he noted, learned about aerial imaging only after clients began receiving non-renewal notices or coverage cancellations based on “roof conditions” observed from above.

“We’d ask, ‘How do you know that?’” he recalled. “And they’d say, ‘We just know.’ Eventually they’d admit they were using Google Maps—or satellite photos from four years ago.”

Imagine being told your roof is in disrepair, only to discover the photo in question predates your last replacement. That’s exactly what many homeowners faced.

“The messaging was so bad,” Susman said. “Consumers thought, ‘They’re trying to get me.’ Suddenly we’re defending ourselves against outdated images and vague data. That’s no way to build trust.”

The Real Problem: Communication, Not Technology

Despite his critiques, Susman was quick to defend the technology itself. Aerial imaging, he argued, has enormous potential to improve risk management for both insurers and consumers. The failure lies in how it was introduced and explained.

“If this had been rolled out properly, we wouldn’t even be having this conversation,” he said. “It really is a good thing for everybody. It eliminates bad information, reduces invasions of privacy, and helps everyone get accurate data.”

The missing ingredient? Transparency.

“Consumers should be told when and how their properties are being viewed, what the data shows, and how they can address it,” Susman said. “That didn’t happen. Instead, they were blindsided.”

Why the Industry Needs Clear Guidelines

Susman called on both legislators and regulators to establish guidelines for how imaging and inspection data are collected, used, and shared.

“We need guidelines that consumers understand and carriers can follow,” he said. “That benefits everyone.”

He emphasized that insurers and consumers actually share the same goal: preventing loss.

“Insurance companies would prefer you never have a claim,” Susman said. “And consumers would love never to have a loss. So we’re on the same page.”

The challenge lies in how to turn that shared goal into a fair and transparent process.

“If insurers can use technology to identify potential problems—like pooling water on a roof—they should provide that information to the consumer,” Susman suggested. “Let the homeowner fix it before it becomes a claim.”

That proactive approach, he argued, benefits both sides: fewer claims mean lower costs for insurers and potentially lower premiums for policyholders.

The Timeliness Issue: “If You’re Non-Renewing Me Today…”

Another key point Susman raised was the timeliness of imagery. Too often, insurers rely on photos taken months or even years earlier to justify non-renewals.

“If you’re non-renewing me today,” he said, “then the risk better look like that today—not six months ago, not twelve months ago.”

Given the rapid pace of drone and imaging technology, Susman argued there’s no reason carriers can’t maintain near-real-time visuals.

“With the cost savings we’re talking about, it shouldn’t be difficult to have another company come out and do a flyover every few months,” he said. “That doesn’t sound unreasonable. It’s only getting cheaper.”

He suggested using that up-to-date data not as a punitive tool but as an early-warning system for homeowners.

“If the carrier sees something concerning, they should notify the consumer proactively,” he said. “Give them a chance to fix it before it becomes a reason for cancellation or non-renewal.”

A New Model for Collaboration

In the long run, Susman believes the solution lies in collaboration—not confrontation—between regulators, insurers, and consumers.

“Technology isn’t going away,” he said. “It’s been here. What we need to do now is get a handle on it and make sure the information provided to carriers is also provided clearly to consumers—and in time for them to take action.”

That’s the heart of his message: transparency and shared benefit.

• For insurers, better data reduces underwriting risk and claims costs.
• For consumers, it means fewer surprises, more time to address issues, and a sense that the system works with them, not against them.
• For regulators and legislators, it ensures that oversight evolves alongside technology.

“If we can put together guidelines that require carriers to share data with policyholders in real time,” Susman said, “we’ll reduce losses, improve relationships, and restore faith in the system.”

From Inspections to Innovation

Beyond inspections, Susman’s remarks speak to a larger industry truth: insurance must modernize without alienating the people it serves.

Automation, AI, and imaging tools are only as effective as the trust they inspire. Without clear communication and responsible rollout, even the most sophisticated technology can erode that trust.

“Nobody wants a loss,” Susman repeated. “If carriers use this technology to prevent them, everybody wins.”

In essence, Susman’s call to action wasn’t about slowing innovation—it was about humanizing it.

The Takeaway: Guidelines, Not Guesswork

Susman’s remarks resonated because they captured a rare balance of realism and optimism. He didn’t reject technology or regulation; he called for smarter alignment between them.

“We’re all beating the same drum,” he said. “We just need to make sure we’re in rhythm.”

His proposed solution—a standardized framework for how property data is gathered, verified, and communicated—could restore equilibrium to an industry struggling to keep pace with its own tools.

If insurers commit to sharing inspection data transparently and consumers are given timely, actionable insights, everyone benefits:

• Fewer claims.
• Lower premiums.
• Higher trust.

In Susman’s words:

“Loss prevention is good for everybody—the carrier, the consumer, and the community.”

Closing Thoughts

Karl Susman’s comments at the NCOIL Summer 2024 Meeting captured the growing friction between technology and transparency in the insurance sector. But they also illuminated a path forward—one grounded in communication, collaboration, and common sense.

As he put it:

“The technology exists. It’s not going away. What we have to do now is use it wisely—to protect consumers, not punish them.”

That’s the balance the insurance industry must strike as it enters a new digital era: smarter data, stronger safeguards, and a shared commitment to fairness.

Because, as Susman reminded everyone in the room, insurance only works when both sides trust each other.