Lawmakers call for transparency from insurance companies using drone images

The California Senate Insurance Committee moved forward with a bill Wednesday aimed at providing property owners greater protections from being dropped from their insurance policy through the use of drone and satellite images. 

The bill would regulate the practice of insurance companies using aerial images to assess the condition of a home in lieu of an in-person inspection. It would require insurers to notify the policyholder that aerial images may be taken of their property, make the images available upon request within 30 days, and prohibit the use of images older than 180 days.

“California homeowners have reported that they were blindsided by non-renewals based on these pictures,” said Democratic Assemblymember Lisa Calderon of Los Angeles, who authored the bill. “In many cases, it turned out that the images were inaccurate or outdated.”

Josephine Figueroa, Deputy Commissioner at the California Department of Insurance, said the bill looks to increase transparency surrounding the use of aerial images to make policy decisions. She said the practice has raised “serious questions” about insurers’ using inaccurate data to cancel policies, noting companies have used images up to 18 months old.

“Policyholders should not have to fight to know when their property is being surveyed, to understand clearly what information is being assumed in those images and know how that information is used to affect their policy.” Figueroa said.

A property owner would also have the right to request an in-person inspection challenging the validity of any policy suspension claim that is supported by aerial images.

However, the legislation doesn’t require an insurer to give property owners advance notice when an aerial inspection will be conducted, nor does it offer an ability to opt out. 

The insurance industry has pushed back against the regulations throughout the lifecycle of the bill, warning that it could exacerbate affordability issues claiming the use of drones has reduced costs for consumers.

“While the cost of an in-person inspection can vary depending on location or type of property, companies have shared that it is generally $75 to $100 per inspection,” Allison Adey, a lobbyist for the Personal Insurance Federation Of California, said at a hearing in May. “The cost of aerial imaging is a mere fraction of that.”

Implementing the regulations could cause insurance companies to forgo the use of drone and satellite images, which could impact the number of policies an insurer can write.

“They simply cannot inspect the number of properties in person that they can via aerial imaging,” Adey said. “It will also increase the cost of insuring each property.”

The bill has also received opposition from those concerned it doesn’t go far enough to protect consumer data.

“Insurance companies can freely sell these images to data brokers who in turn sell to a wide range of buyers,” Becca Cramer-Mowder, a lobbyist for the non-profit Privacy Rights Clearinghouse, said on Wednesday. “From immigration enforcement agencies undermining California's sanctuary protections, to stalkers and harassers targeting vulnerable individuals, to criminals planning break-ins.

The bill doesn’t contain language on data security as it relates to the maximum amount of time a company can keep images or deletion requirements. 

Cramer-Mowder also pointed to the lack of privacy limitations such as mandatory blurring of people, neighboring properties, or how images can be used for purposes beyond insurance.

“The bill fundamentally fails to protect Californians’ privacy,” Cramer-Mowder said “Instead, it legitimizes and normalizes a deeply invasive surveillance practice that most homeowners remain completely unaware of and that has the potential to harm Californians beyond just insurance impacts.”

Members of the insurance committee acknowledged the privacy concerns and promised to work with the opposition on the legislation moving forward. It now heads to the Judiciary Committee.