Insurance Bulletin #241: Use of Aerial Imagery by Property & Casualty Insurers

The Department of Financial Regulation is aware that property insurers have been using aerial images of insured properties to evaluate the condition of properties including but not limited to roofs, siding, and tree overhang. Insurers have been using these aerial images in underwriting, pricing, and likely in claims handling. For example, insurers have issued non-renewals if an aerial image appears to indicate that a roof is damaged, degraded, or shows discoloration and/or cosmetic damage. Insurers have also used aerial images to determine a roof score for a property and then used that score in pricing the premium for property coverage. The Department reminds insurers that 8 V.S.A. § 4681(5) provides that one of the purposes of the Property & Casualty Insurance Rate Regulation is ‘to promote availability, fairness, and reliability of insurance;’ and 8 V.S.A. § 4724(7) sets forth standards for unfair practices. The bulletin provides guidance on the appropriate use of aerial imagery in underwriting and pricing decisions, ensuring that insurers comply with Vermont’s insurance laws regarding fair practices and rate regulation.