On March 19, 2024, the Connecticut Insurance Department issued a bulletin to address the use of aerial imagery by insurance carriers in underwriting homeowners insurance, specifically in relation to decisions about roof condition. This bulletin responds to a rise in consumer complaints about certain insurance carriers nonrenewing policies based on aerial images that indicate roof damage without definitive proof of substantial degradation.
What’s the problem with aerial photographs?
The bulletin asserts that while aerial photographs showing clear material damage to roofs may justify underwriting decisions, mere discoloration, streaking or other cosmetic issues, which don’t affect a house’s structural integrity or increase loss risk, are invalid reasons for policy nonrenewal. Insurance carriers are urged to distinguish between cosmetic imperfections and actual material damage that impacts the roof’s functionality.
Further, through consumer complaints and thorough investigations, the bulletin references identified instances in which some insurance companies were basing nonrenewal decisions on superficial attributes observed in aerial images, which didn’t definitively show significant damage.
The CID’s response
To counter this practice, the CID has reinforced its protections against the use of aerial imagery in underwriting. According to Connecticut General Statutes Section 38a-689, carriers are required to submit underwriting guidelines with the CID—especially if underwriting decisions are based on the roof’s age or condition. These guidelines must include all pertinent rules and conditions to allow the CID to ensure compliance with approved standards.
The bulletin reiterates the importance of aerial photography in underwriting, but it emphasizes the need for safeguards to protect consumers from misuse. If aerial images fail to show “unequivocal material damage” clearly, carriers can perform a physical inspection to confirm and document the damage shown by the images, or they can obtain a comprehensive report from a licensed home improvement contractor or roofer that evaluates the roof’s condition as reported by the insured. Both measures are designed to ensure that underwriting decisions are fair and accurate, protecting consumers from potentially unfair actions.
Lastly, the bulletin cites Connecticut General Statutes Section 38a-323, a statute that requires carriers to provide at least 60 days’ advance notice of nonrenewal with clear, specific reasons for nonrenewal of homeowners insurance policies. In addition to reminding carriers of their obligations under the law, the bulletin urges carriers to provide detailed explanations of roof damage.
This will allow policyholders ample time to address issues or seek alternative coverage from another insurance company. Recognizing the challenges of scheduling roof repairs on short notice, the bulletin also encourages insurers to issue these notices well before the mandated 60-day mark.
PIA has contacted insurance departments throughout the Northeast on this issue and the association will continue to monitor this practice.
Theophilus Alexander
Theophilus W. Alexander joined PIA Northeast as a government & industry affairs specialist for the Government & Industry Affairs Department in 2023. Prior to joining PIA, Theo had served in both houses of the New York State Legislature. Previously, he worked as a legislative analyst for Hon. New York State Sen. Samra G. Brouk, D-55, and he served at the New York State Assembly, as a policy analyst with New York Assembly Program & Counsel. Theo received his Bachelor of Arts degree in Politics from Ithaca College in Ithaca, N.Y.
