Drones in Flight While Consumer Concerns Rise

A significant trend is the growing use of drone technology by insurance companies to assess storm damage and make decisions about writing or renewing homeowner’s insurance policies. While drones offer a cost-effective and efficient way to survey properties, particularly in areas impacted by severe weather, their use has sparked debate and prompted legislative action due to consumer concerns. 

For you and your business, understanding the advantages of drone technology can help you better explain the benefits to your clients and how this could even help lower rates. Drones can quickly cover large areas and capture high-resolution images of properties, enabling insurers to assess damage accurately and expedite claims processing. This capability is particularly valuable after storms or natural disasters when ground access may be difficult or dangerous. 

Furthermore, drones can assist in evaluating risk factors for potential clients. Aerial imagery allows companies to identify issues such as roof damage, overhanging trees, or other hazards that might not be visible from the ground. This proactive approach can enhance underwriting accuracy and potentially reduce the incidence of fraudulent claims, ultimately benefiting your clients through more precise policy assessments. 

Despite these benefits, there have been some consumer advocate concerns. These concerns are about drone usage by insurance companies. A primary issue is the potential for unfair coverage decisions based on inaccurate or outdated aerial images. Across the country, homeowners have reported instances where their insurance was dropped or not renewed due to drone images that did not accurately reflect their home’s current condition. 

For your agency, it’s important to be aware of these concerns. Reliance on drone imagery can sometimes lead to misjudgments, especially if the images do not account for recent repairs or improvements. This can result in your clients being unfairly penalized and losing essential coverage, highlighting the need for accurate and current data in the insurance process. 

In response to these concerns, Ohio Representatives Lampton and Young introduced House Bill 450, which seeks to expand the scope of voyeurism, criminal trespass, and aggravated criminal trespass statutes to include the use of drones. The bill defines a drone as an “unmanned aerial vehicle system” and extends existing legal protections to include corporate entities. 

During the bill’s sponsor testimony, Rep. Lampton, Chair of the Ohio House Insurance Committee, acknowledged that the legislation might impact surveyors and insurers’ practices. He explained that while drones are frequently used in claims processing, insurers should obtain permission from property owners before deploying drones. Rep. Young emphasized that policy provisions, often referred to as “disclaimers,” could be amended to explicitly include such permissions. 

Several questions remain unresolved regarding the legislation, including specific height restrictions for drone flights and how the law will apply to law enforcement agencies. However, Chair Lampton has expressed a willingness to collaborate with the insurance industry to refine the bill, ensuring it addresses both consumer protection and practical needs. 

As drone use in insurance continues to evolve, it is crucial for independent agents to balance technological advantages with consumer rights.  

The integration of drone technology in the insurance sector offers substantial benefits in terms of efficiency and accuracy, which can directly impact your ability to serve your clients. However, it also raises important concerns about fairness and privacy. By staying informed about ongoing legislative efforts and understanding both the advantages and potential pitfalls of drone technology, you can better navigate these changes and advocate effectively for your clients. This knowledge will enable you to foster a cooperative environment where both insurers and consumers benefit from technological advancements while ensuring equitable treatment and privacy protection for all homeowners. 

If you have additional questions about this topic, or our advocacy efforts or want additional information please contact John Wells, OIA’s Government Affairs Manager atjohn@ohioinsuranceagents.com. 

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