We’re seeing more scare headlines about home insurance companies using aerial imagery to assess home roofs. In our view, these fears are mostly overblown click bait on a slow news day.
Insurers pay special attention to roofs, and they do this because older, worn roofs tend to have more claims.
Although requirements do vary somewhat from company to company, most home insurance companies are interested in insuring good roofs. This is because too many claims create expenses that their existing customers will share through the premiums they pay. In other words, more claims lead to higher home insurance prices.
So what about this new aerial imagery?
It’s helpful to think back a bit ago, before aerial imagery and AI. How did it work before?
Under the older approach, either your agent or a third-party inspector would come out and take photos of your roof. Then, the insurer used those photos to evaluate the risk.
Under the new approach, many companies have added aerial imagery as another tool for evaluating the risk. And they’ve trained software to automatically identify the signs of a deteriorated roof. (This is a similar approach to what some states are using to scan areas for wildfire prevention.)
They may use the imagery to reject the risk right away. For instance, if the imagery shows moss buildup or big trees hanging over the roof, the company may automatically decide they don’t want to insure the house.
Or they may use the imagery to ask for further property inspection. For example, they may see some deterioration but really can’t tell without an onsite visit. In this case, they’ll usually send an inspector or request updated photos from the agency.
Now, from the vantage point of the insurance company, this reduces the number of people needed to evaluate roofs and the potential number of claims which allows them to find predictable risks, make a marginal profit, and keep home insurance rates competitive.
That last one is the important one to us consumers. We want better home rates and this new tech that helps insurers do something they’ve always done, evaluate homes more efficiently. That is one way to help keep prices down.
But we did say it is mostly overblown click bait. Why mostly?
This is because some carriers implement these new approaches better than others.
We need to acknowledge that there can be some frustrating situations for agents and consumers. For example, I’ve seen where the simple pattern of a roof only 12 years old led a company to inspect the house when really it was just the pattern of the roof by design. I’ve also seen a system request an inspection on a 3 year old home in a brand new development!
So the aerial imagery systems are certainly not perfect, but then again, neither were agents or 3rd party inspection companies before aerial imagery. (I’ve seen inspectors get the number of floors and ceiling height wrong!)
Along those lines, there do need to continue to be important consumer safeguards in place.
One example of a good safeguard is that when insurance companies non-renew or cancel coverage they are required to provide notice a certain number of days ahead of time. This is super important because it gives homeowners time to find new insurance. And there may be other ways of strengthening consumer protections in response to the new technologies.
Also, we’d suggest that good insurers should work to maintain a responsive appeal process for agents and consumers because sometimes the software gets it wrong–sometimes AI is as dumb as a box of rocks.
There does remain an important cultural and political discussion about privacy. Perhaps similar to a car insurance company checking your driving record for car insurance rates. Even so, there’s more good thinking to be done in this area. . . . In the case of a roof, it’s directly related to the insurability of the home at a time when someone either has or is asking for to insure a house. Seems reasonable.
Overall, we’re okay that companies are seeking more efficient ways to screen out roofs. The reality remains that if your roof is a reasonable age and you take care of your roof and property, you’ll be able to find insurance.
Related post: “Roof Redone? Notify Your Insurer”
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