Real Estate News & Market Insights:
- Insurers use aerial imagery and AI to flag roof damage remotely, speeding decisions but risking misreads and homeowner surveillance.
- Experts like Daniel La Gamba and Melanie Musson warn oversight is weak; state insurance departments often lack enforcement authority.
- Homeowners should document condition, request the insurer's imagery and data, provide time-stamped proof, and get licensed inspection reports.
- File complaints with your state Department of Insurance and work through local agents to appeal nonrenewals or incorrect cancellations.
When Roseanna Castillo opened a letter from her home insurance company this fall, she didn’t expect to find an $18,000 problem. The notice claimed her roof showed “granular loss”—a form of shingle deterioration—based on aerial images captured from Google Earth.
To keep her coverage, she was told she needed to replace the roof in just six weeks or risk losing her policy. Castillo, who lives in Illinois, had never requested an inspection and hadn’t spoken with anyone from the company. The discovery that her insurer had reviewed her home without her knowledge or consent left her stunned.
“This was an unsolicited inspection on my home,” Castillo told CBS Chicago. “I never asked for this.”
After filing a complaint with the Illinois Department of Insurance and alerting the company she had spoken to reporters, the insurance giant dropped the requirement and renewed her policy without proof of repairs.
But the episode raises bigger questions about how insurers are now evaluating homes. When a company can inspect your property without ever setting foot on it, what rights do homeowners really have? And how accurate are the algorithms and aerial images shaping those decisions?
How the industry is using aerial imagery and AI
Castillo isn’t alone. Insurers across California, Pennsylvania, and Florida have reportedly used aerial photos to decide whether to drop customers, NPR reports.
It’s part of a broader industry shift driven by two converging forces: mounting claims costs from natural disasters and inflation, and the growing availability of high-resolution satellite and drone data.
“The use of aerial imagery, drones, and artificial intelligence in insurance underwriting has grown exponentially in the past five years, primarily due to the cost savings on inspection and human error,” explains Daniel La Gamba, a real estate lawyer at LD Law.
While critics warn these inspections are becoming less transparent and more invasive, industry advocates frame the technology as a way to make assessments faster, safer, and fairer.
Roof damage is one of the biggest drivers of homeowner insurance claims—accounting for roughly 34% of all property claims, according to a Moody’s analysis. Traditionally, inspecting a roof meant dispatching an inspector to climb, photograph, and document any damage in person.
But that process can be expensive and dangerous—just ask my dad, a residential home inspector for the city of Phoenix, who has fallen off or through a roof no fewer than three times.
To insurers, aerial imagery solves both problems: It can capture detailed overhead views of millions of properties without sending a single person onsite. Those photos can then be fed into AI models trained to detect risk features such as missing shingles, unpermitted structures, or even the presence of a trampoline.
For Castillo’s insurer, though, the process was much simpler: a simple cross-check with Google Earth.
“To clarify, drones and AI were not used in this process. We use aerial imagery to enhance the customer experience, ensure pricing accuracy and fairness, and support safer, faster, and less intrusive property inspections compared to in-house visits,” a spokesperson from the insurance company told CBS News.
But consumer advocates say that without oversight, homeowners are being surveilled, sometimes without their consent.
“Drones and AI analysis are making it so easy for insurers to spy on customers. They’re a way an insurer can more accurately assess its risk. But in doing so, homeowners’ policies are being cut, and sometimes for no real reason,” says Melanie Musson, an insurance and finance expert at Clearsurance.com.
The regulatory gray zone
Part of what may be driving the spike in these practices is that there isn’t a standard regulation for the practice, says La Gamba.
“There are no standard regulations regarding how up-to-date the imagery must be or what kind of accuracy testing should be done on AI programs before they affect coverage decisions,” he explains.
“Residents from the standpoint of privacy have no control over how drone flyovers cover private areas like backyards or patios without some kind of permission, raising potential Fourth Amendment and data protection concerns,” he adds.
Consumer advocates also warn of “black-boxed” AI systems that operate with little transparency around how data is collected or interpreted. In the absence of widespread regulation, oversight largely falls to state insurance departments, which can investigate complaints but lack the authority or resources to set consistent national standards.
How to push back if you suspect an aerial or AI error
Any denial or nonrenewal letter from your insurer is likely to cause a moment of panic, but experts say the key to disputing these notices is not to stress or ignore them.
“If a homeowner receives a notice that includes aerial or AI-inspected photos, the first reaction is to relax and respond immediately in writing,” says La Gamba.
Here’s how to respond strategically.
1. Review and document everything
“AI analysis isn’t always accurate,” emphasizes Musson. “Even human reviewers can misinterpret imagery.”
Common errors include shadows mistaken for mold, neighboring roofs flagged as your own, or stale poststorm photos showing temporary tarps.
La Gamba advises taking new, time-stamped photos from multiple angles, especially of the area in question.
If possible, hire a licensed contractor or inspector to issue a written statement confirming the property’s current condition. Having this documentation before calling your insurer gives you leverage when disputing its findings.
2. Request the imagery and data
Homeowners are entitled to see the materials used in underwriting or renewal decisions. So if you’re not sure how your insurer reached a conclusion, ask to see the evidence.
“Most state insurance codes—including in California, Texas, and Florida—require insurers to disclose the precise basis for nonrenewal or rate changes,” La Gamba explains.
If the company refuses, you can invoke your state’s “adverse underwriting disclosure” rights or, if third-party data or algorithms were used (like Google Earth), reference the federal Fair Credit Reporting Act.
3. Provide your own evidence
Once you’ve gathered your records, submit them in writing with clear, labeled images. Include plot maps or county property lines to show boundaries if the aerial data confused your lot with a neighbor’s.
“For example, if the analysis identifies a swimming pool that the owner has not declared, but that pool belongs to the neighbors, the homeowner needs to provide pictures of their pool-free backyard,” says Musson.
Third-party documents—like contractor invoices or municipal inspection reports—can also help by adding weight to your claims.
In one of La Gamba’s cases, a client’s policy was reinstated after proving that a flagged “deteriorated” roof had been replaced just eight months earlier, supported by permit and contractor records. Another Florida homeowner won a reversal after aerial photos incorrectly showed “unmaintained vegetation” following a storm cleanup, but archived landscaping invoices and city notices set the record straight.
4. File a complaint when needed
If your insurer won’t share evidence or rejects your appeal despite new documentation, it’s time to file a complaint with your state’s Department of Insurance.
Even in states without explicit laws on aerial or AI use, complaints can trigger investigations and force insurers to produce the data behind their decision.
La Gamba notes that California regulators have compelled companies to reverse cancellations when insurers relied on outdated wildfire imagery. While resolution can take weeks, complaints help establish precedent and draw regulatory attention to recurring problems.
5. Work through your local agent
When possible, start with the human connection.
“If there is a local agent the customer can talk to, that’s often the best way to resolve the issue rather than trying to communicate with a corporate office that doesn’t know who you are,” says Musson.
Agents can flag internal errors, escalate your case, and advocate for reconsideration before it reaches the cancellation stage.
The ripple effect
As aerial and AI surveillance expands, quick documentation, written communication, and persistence remain the strongest defenses.
“The technology is racing ahead of the law,” La Gamba says. “The key to these successful cases was swift action, clear documentation, and persistence through proper channels of regulation.”
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