HARRISBURG, PA — The Pennsylvania Insurance Department (PID) is urging insurers to conduct physical inspections of roofs before canceling or not renewing policies based on aerial imagery. This reminder follows several consumer complaints about insurers using aerial photos to make decisions on policy termination due to roof conditions.
Commissioner Michael Humphreys stated that some aerial images used by insurers show only cosmetic issues like discoloration or streaking, which shouldn’t be grounds for policy cancellation. PID emphasized that while they support innovative risk assessment methods, these must be applied reasonably and fairly.
The Department published a notice in the Pennsylvania Bulletin on May 25, reinforcing that insurers should allow consumers to challenge inspection results or address identified issues before a policy is terminated. “Some of the aerial images we’ve seen barely identify the structure of the home,” Humphreys said. He stressed that insurers need to provide clear reasons for policy actions and give homeowners a chance to remedy any issues.
Experts say this move by PID aims to balance innovation in risk assessment with consumer protection. Aerial imagery can help insurers assess risks more efficiently, but it must not replace detailed physical inspections when making critical decisions about coverage.
The Unfair Insurance Practices Act mandates that insurers must:
- Clearly state both legal and factual reasons for terminating policies.
- Prove that there has been a substantial increase in hazard since the policy was issued.
- Not base cancellations on mere suspicion or unverified conditions.
- Provide proper notice and an opportunity for homeowners to fix any issues before policy termination.
This notice from PID highlights the importance of thorough and fair inspections in the insurance industry. Properly conducted inspections can prevent unjust policy terminations and ensure that consumers are not unfairly left without coverage. This move also emphasizes the role of transparency and communication between insurers and policyholders.
The implications of PID’s stance are significant. If insurers comply, homeowners may face fewer sudden cancellations and have more opportunities to address their roof conditions. For the insurance industry, it means integrating technology with traditional methods responsibly, ensuring innovations do not compromise fairness or accuracy.
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