Tdci Shares Important Considerations For The Use Of Aerial Imagery As It Relates To Insurance Coverage

The following information was released by the Tennessee Department of Commerce and Insurance (TDCI):

The Tennessee Department of Commerce and Insurance (TDCI) announces new guidelines for insurance carriers when using aerial imagery, including drone photography, when inspecting consumers' properties.

While aerial imagery can provide benefits when used appropriately, such as evaluating property after severe weather, its misuse can result in inaccuracies and confusion. For example, aerial imagery can be misused if an insurer relies solely upon aerial images that are vague, outdated, show an inaccurate structure or property, or do not clearly show the current state of damage or disrepair.

Accordingly, TDCI is reminding insurers to always use due diligence when utilizing aerial imagery in order to ensure that action taken is based on accurate, current information.

"Our team is aware of incidents in other states where homeowners' insurance policies were not renewed or cancelled as a result of the use of aerial photography," said TDCI Commissioner Carter Lawrence. "While this has not occurred to the best of our knowledge in Tennessee, insurers must be mindful that aerial imagery has its limitations and should not be the only information utilized in the decision-making process. I encourage insurers and consumers to contact our team with their questions about the use of aerial photography when providing insurance coverage."

TDCI's aerial photography bulletin states the following:

Aerial photography should not be the only tool used by insurance carriers to evaluate a property. If aerial imagery does not provide an accurate indication of the condition of a property with certainty, the insurer should work to obtain recent, clear information, through a physical inspection or otherwise, to establish if there is an issue with the property.

Homeowners should be notified of the use of aerial photography. If aerial photography is being used to support a carrier's decision about a homeowner's policy, it is best practice for insurers to notify the homeowner before taking the action, advise the homeowner that the action is being taken based upon aerial imagery, and provide the homeowner with copies of any aerial images used in making the determination. Homeowners should be allowed to provide updated information or dispute the accuracy of the aerial imagery that was used.

The age and clarity of aerial photography must be considered. Carriers should ensure that any aerial imagery used to inform a decision about a homeowner's policy is recent and accurate. The use of older, blurry, or outdated aerial imagery is unreliable and unlikely to provide a sufficient basis on which to deny a claim or cancel a policy.

Using aerial photography to enact unfair claims practices may result in violations of state law. Satellite or aerial images of insured property that are low-resolution, out-of-focus, blurry, or outdated do not accurately represent the current condition of the property and cannot reasonably justify the denial of a property damage claim. Therefore, denying a claim based solely on satellite or aerial images that are unclear or imprecise constitutes an unfair claims practice in violation of Tenn. Code Ann. 56-8-105.

To file a consumer insurance complaint, visit our website or contact us at 1-800-342-4029 or (615) 741-2218.

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