Home insurers are dropping customers based on aerial images | Hacker News Reader

Home insurers are dropping customers based on aerial images

wsj.com

305 pointstraviswingo680 comments

I don't really understand the privacy concern here. To wit: insurers can demand actual inspection of your home when making underwriting decisions. The condition of your house is very much their business. Why is an aerial photograph of your roof, which everybody in the world already has on Google Maps, such a big deal?

I think the issue is that in some cases the information is inaccurate and there are sometimes limited avenues for a customer to object if their insurance is cancelled based on inaccurate information.

To the extent that the information is accurate, I agree. If you make an agreement with a company and buy insurance based on your statement that you don't have a pool, but then you do have a pool, I don't see any reason why we should be upset that you didn't get away with lying to the insurance company.

Last time I was shopping for home insurance, an agent told me I was too close to a canyon, which I thought was strange because there are no canyons near me. They sent me a screenshot of the fire danger map where clearly it had the wrong location / coordinates for my address (they thought I was about a mile from where I really live).

I pointed them to my address on Google Maps which has my correct location, but they said their system isn't wrong and the address coordinate mapping can't be changed anyway. Go away.

Then another insurance company told me the same thing. I thought maybe I was going to be uninsurable completely based off of a computer error.

Luckily, Lemonade has smarter systems and got my location right, so I was able to get insured with them. But I'm not sure what I would do without lemonade.

> Luckily, Lemonade has smarter systems and got my location right, so I was able to get insured with them. But I'm not sure what I would do without lemonade.

Insurers with better information will be able to judge risk better, so they can undercut competitors on lower risk or avoid taking on higher risk. That really is what a competitive insurance market should be like right?

I bought a house in when internet mapping was less mature, but still important, and many of the online data sources simply did not have the address. This was good at first, since very few people seemed to have been able to find the open house and bid against us, but it was annoying in the long run because you'd ask for Internet service to be installed and the technicians would blow off 2 appointments driving around the city lost and eventually you would have to talk them to the location turn-by-turn.

The solution was to complain vociferously to the folks that maintained data sources. In those days it was Google, someone else, and it turned out the remainder of the defective commercial products were put out by a predecessor of, I think, the folks who eventually published or supplied the data for HERE We Go. Basically, every few months I would call them or write messages to them, social engineering who might be in a position to fix it. They did respond pretty quickly, for a bigcorp, but it took a few years for the prior versions of their database to cycle out of usage.

Thank goodness you learned early that those other insurance companies were incompetent and unwilling to work with their customers even in the face of obvious mistakes on their part. If they had accepted you, you wouldn't want to have had to deal with trying to get money out of them, especially when you'd already be dealing with a stressful situation. They really did you a favor by rejecting you, and you now know to stay away from them when it comes to other types of insurance too.

Reminds me of a few years back when my dad tried to get ATT DSL for my grandpa’s house. ATT told him they couldn’t find his address with their system. My dad reminded ATT they had a landline through ATT for fifty years. “Sorry, different system.” Got cable internet instead.

You should request your data from CoreLogic and see if the wrong location is in their DB, because they’re the broker for a lot of real estate underwriting data.

I wonder if there’s a small-claims court claim here. It’s sort of annoying to have to jump through this hoop, but this is the sort of situation where you have to make it the right person’s problem to get what you want.

In the framework of GDPR (which I know is not applicable in the US) you have the legal mandate to ask them to correct information about you.

I think that is very reasonable law: If n organisation makes decision about your relations, you should be able to force them to process correct information.

(I have used that clause ones, when a bank wrongly reported that I had an open account of a certain type, which resultet in that I could not open that type of account at another bank.)

I had a similar issue with my car insurance. My mother in law, who shared a first and last name with my wife, got into a car accident, on my insurance.

I worked it for a year and was unsuccessful in removing it. Ironically, my wife passed away but the accident is now associated with her car. They did figure out however, that I’m no longer eligible for a multi-driver discount.

> but they said their system isn't wrong and the address coordinate mapping can't be changed anyway.

That is some breathtaking hubris.

I wonder how many such properties are misclassified?

This sounds like a Lemonade ad.

> I'm not sure what I would do without lemonade.

Me too. So. many. lemons :-)

They can generally decline coverage for any reason, for what it's worth; they could cancel without aerial footage just on the hunch that you didn't replace your roof, or they could mass-mail their customers demanding proof of roof replacements.

(The article and other things I'm reading suggest that cancellations are because footage finds trampolines and pools --- in which case I don't even understand how anybody can have sympathy. It's fine to have insurance risks on your property! But disclose them!)

It's interesting that insurers will spend money to discover this rather than rely on the pro forma clause that claims proceeding from an undisclosed risk are invalid. I'm guessing they calculate that a jury may not respect that part of the contract when confronted in court by grieving parents of an accident victim.

How is an unversed lay homeowner who is inexpert in the insurance industry (or perhaps even any industry) supposed to know what risks an insurer thinks are important?

Their job, I think, is to accept the quote, pay the premiums, and to keep living life.

It's up to them to make their own risk assessments. There's a lot of press when claims get denied but it's not as common or as easy as complainants make it seem. Especially when it comes to roof replacements. That's been a heavily exploited point as well. Lots of shady operators chasing storms.

Also trees can have a lot of impact on your insurance rate, like if you have a neighbor's trees intruding into your property, remember that it is the property's owner responsibility and not the owner of the tree, so they could ding you for that. Or if they notice you are too close to a tree line in an area known for wild fires, etc...

Some insurance companies will allow trampolines -- at a cost. We had to get rid of ours because the cost and liability just wasnt worth it.

So in the richest country in the world parents can't let their kids play on trampolines because a neighbours kid having an accident on one would bankrupt their insurance company.

Meanwhile, toddlers do active shooter drills like they are fire alarm drills.

Totally logical country you got there with a perfectly reasonable approach to risk.

Most people don’t declare then which is really stupid imo.

There was a case recently in NZ where home owner tried to defraud an insurance company. Well suddenly none of the insurance companies would work with him. Insurance is a requirement for mortgage so this person is effectively going to loose his house.

False positive with similar circumstances would be a nightmare.

Has anyone in NZ ever had a bank check if they are insured after purchase? They asked on signing the loan. But after that they never check.

I'm curious-- have a link?

So this wasn't even fraud on his home insurance, but on car...

https://www.rnz.co.nz/news/national/508570/auckland-annivers...

> there are sometimes limited avenues for a customer to object if their insurance is cancelled based on inaccurate information.

This is part of the risk one takes buying property. It’s more than offset by the benefits of buying property. Or else everyone wouldn’t be telling me what an idiot I am for renting.

No, it's definitely not. No one accounts for the risk of being rejected due to inaccurate information. It doesn't even make sense to do so because the nature of the probability isn't definable.

They can also use the info to decide if they allow a renewal.

They can decide not to renew for any reason - including that they just decided not to do house insurance at all anymore.

    > if their insurance is cancelled based on inaccurate information

I see this type of comment on HN too often. Some hypothetical bullshit scenario followed by a BIG if. Armchair quarterback type of comment.

In all highly advanced countries (G7 and similar), insurance is insanely strictly regulated. If they cancel your policy for a b/s reason, and your protests are ignored, then tell the regulators. They will fix it quickly and slap a huge fine on the insurer.

> If they cancel your policy for a b/s reason, and your protests are ignored, then tell the regulators. They will fix it quickly and slap a huge fine on the insurer.

You have too much faith in the regulators, that's not how it works.

Insurance companies are violating these rules all the time, only when you can gather a critical mass of complaints against a specific one will anything happen.

> I see this type of comment on HN too often. Some hypothetical bullshit scenario followed by a BIG if. Armchair quarterback type of comment. In all highly advanced countries (G7 and similar), insurance is insanely strictly regulated. If they cancel your policy for a b/s reason, and your protests are ignored, then tell the regulators. They will fix it quickly and slap a huge fine on the insurer.

Except that according to the article this "hypothetical bullshit scenario" is already happening and there are even several examples of it happening including one where a person was rejected for the condition of their roof when the roof was brand new, and another where a person was rejected because of trees that were nothing more than shadows.

Since you know that it's so easy to "tell regulators" and get things fixed quickly you should reach out to Douglas Heller, the director of insurance at the Consumer Federation of America, because he's under the impression that “The technology is way ahead of any consumer protections” and consumer groups feel that inspections via aerial images are "worrisome because of the limited rights customers have to challenge the images"

You can find Mr. Heller here (https://consumerfed.org/expert/douglas-heller/). I'm sure Douglas would love to learn about how none of this is a problem because "insurance is insanely strictly regulated" and your expertise would mean that he can better help the people currently struggling with this issue and potentially even save others from having to deal with it in the future.

I suspect very few customers have the wherewithal and time and effort to “tell the regulators”. (Who, to issue a fine, would have to show malfeasance so the customer needs to produce evidence of the interaction sufficient to show the insurer broke the law)

Agreed.

I've definitely reached out to insurance regulators in the past and things got fixed. (In the USA.)

It’s an issue of scale. Similar to police tracking phones. Police have always been able to assign an officer to follow a suspect, but it’s expensive and therefore rarely done.

If insurance companies can cheaply inspect everyone’s house from space, the end result will be to lower prices for people with homes in perfect condition and raise them for everyone else.

This is potentially problematic because the people with houses in poor condition are the least able to afford added costs in general.

Why is it not a good thing if insurance is more accurately priced? Insurance isn't a redistribution mechanism. And dilapidated roofs aren't a social good. Municipalities have actual redistribution schemes to make these kinds of repairs.

I'll note that there's nothing at all redistributive about sneaking a trampoline onto your property, too.

Further, I'll note that working class people also take pride in their houses and pay to keep them up, and they too are being asked to subsidize people who are getting rate breaks from false assessments.

Later

My municipality will make an interest-free loan of up to $25,000 to cover the kinds of property repairs we're discussing, if you're income-qualified (ie: not too rich to just pay to replace your own roof).

Because everything is turned as a cash-grab by corporations and prices never go down.

In some states insurance rates are regulated. Definitely know they are in California.

That said whether the regulators are effective in keeping costs down is a different issue. But my not-very-deep understanding is that risks are rising, e.g. large wildfires in the US West, and increased hurricane frequency and strength on the Gulf Coast, and the only way to deal with that for the insurers is to raise prices, or drop customers - sometimes to the point of abandoning the market altogether. This sounds like another piece in that trend.

You've never seen anything on sale?

But inflation is good TM

I’m not arguing what insurance should be I’m merely talking about the end result of this technology.

I guarantee you income is correlated with state of home repair. If insurance companies can more easily access state of repair, lower income individuals will end up paying more than they did previously.

Regardless of whether that is fair, it is a change from the status quo, and it’s obvious why some people would consider that problematic.

Lol that’s precisely what it is. It redistributes the cost of accidents. Across all its members, paid forward.

Just don’t get insurance and nothing of yours will pay for anything belonging to anybody else.

No, it's not. The idea of a risk pool is that everyone's catastrophic risks cancel out, not that people who replace their roofs also chip in to cover hail and water damage for people who don't.

It's incorrect to assume that more data points implies more accurate pricing, as we're talking about very limited very simplistic models. It's more plausible to envision those extra data points serving to confuse the market and make it less competitive, rather than actually helping to accurately price risk.

Every new data point partitions the statistical population size into two smaller parts, each with their own larger variance (ie the insurance company's risk). The insurance company could statistically combine the risk from each partition into the same original, but it's more likely they'll focus on the higher independent risk figures and raise premiums an outsized amount to cover each individually. And this effect is going to be more pronounced the more lopsided the partition is, leading to similar monoculture incentives as we see in the mortgage/housing bubble. For example, I'd bet there's somewhat of a correlation between insurance claims and whether a house is painted beige.

That is how rates can go up even when the extra data is fundamentally sound. But there can also be just enough extra information to be damning, but not enough to exonerate. For example after the "Do you have a trampoline" question, is there a follow up of "Do you let guests use it" ? Or perhaps a more formal "opt out of all liability coverage for the trampoline" ? Likely not.

Then of course there are places where the model is irrelevant or even outright wrong, because the thing being singled out seems like it rocks the boat. Like the driver surveillance devices that penalize focused acceleration due to perceived association with racing, when it's much more likely that the driver is actually paying attention to driving. Or penalizing people for going over the posted speed limit, when it's actually safer to go the prevailing speed of the road.

I didn't say anything about more data points. I'm talking about insurers being able to properly gauge whether existing customers are adhering to the terms of their policy, or whether they're free-riding off the premiums of their neighbors by defrauding the insurer.

You describe theory. In practice, the price will not drop for you at all, but will increase much for others, or they will be unable to get insurance.

In fact your price will propably increase since more overhead needs to be allocated to fewer customers.

> Insurance isn't a redistribution mechanism

That's exactly what insurance is. The whole premise is that they will dip into other people's payments to pay you if you ever encounter a covered issue. If insurance only ever paid you back some fraction X of your own contributions, why would you ever buy it? It would make infinitely more sense to deposit whatever you would have paid to insurance in a high yield savings account.

Isn't insurance entirely a redistribution mechanism?

> Why is it not a good thing if insurance is more accurately priced?

Another poster here, Scoundreller, recently responded to one of my comments on another topic with this insight:

> The funny thing about insurance is that as it becomes perfect at assessing risk, it becomes worthless.

> Oh, you’re about to have a $x claim this year, your premium is $x + y% admin fee.

> Just self insure and save yourself the y%.

There's likely a point where the more accurately priced a policy is the less worthwhile that policy is to purchase, which really wouldn't be a good thing for the insurance industry. The use of aerial photography probably isn't enough to put them over that threshold, but the closer they get, the less attractive their offerings will be. Considering that the insurance companies mentioned in the article have billions in revenue and assets I'm not sure they have a compelling need to resort to this level of surveillance in order to make good money. None of them appear to be going broke due to rogue trampolines anyway.

At the risk of being callous, the goal of home insurance is to assess and manage risk. Choosing ignorance in the interests of giving some people a subsidy on the assumption that they may be poorer does not further these goals in any way I can see.

If the goal is redistribution, then using accurate risk data as a starting point seems preferable.

> At the risk of being callous, the goal of home insurance is to assess and manage risk.

No, risk assessment and/or management is an internal operational concern.

The goal of insurance providers, home or otherwise, is to charge fees such that the insurer collects as much revenue as possible while simultaneously expending as little as possible to remedy claims.

Any justification legally available to an insurer supporting denying or reducing a claim will be employed.

If your insurers goal is revenue i suggest you go look for a new mutual insurance.

(no, this is not some hippie collective thing, in many countries this is the norm, see https://en.wikipedia.org/wiki/Mutual_insurance)

> the end result will be to lower prices for people with homes in perfect condition

Nobody will see lower prices. Perhaps these perfect homes might see slightly smaller increases year to year.

> houses in poor condition

The point of the thread is that they're dropping people for random noise in satellite photos. The house might be perfect, it's just the photo that's wrong. But they don't care.

> the end result will be to lower prices for people with homes in perfect condition

I'm not that optimistic.

The solution seems to be to remove the insurance mandate, and allow purchasing insurance across state lines. That way two locked-in markets are opened to more competition.

Effectively removing the ability of states to regulate businesses in their own jurisdiction.

What insurance mandate?

The problem is the culling

Insurance companies are very keen to get as much risk as possible off their books before the climate gets even more extreme in its volatility

Good goes with bad, so long as the bad goes, some good going too is undesirable but OK because they are aware if the catastrophic climate events looming

The insurance companies are behaving logically, probably legally IANAL, but for people who are simply caught in the wash it is unfair

This is part of the huge systematic disruptions we are all going to have to adapt to, or die from, due to climate change

Worrying times

Insurance companies are keen to align risks with premiums. The more accurately they do so, the less volatility they will have. And in the short run, probably more profit as well. This also helps consumers, where lower-risk folks will overpay less, and higher-risk folks will be required to lower their risk or contribute more in premiums.

Insurance companies want money to come in and never go out. If they could they would sell life insurance to dead people and homeowners insurance to the homeless.

The irony here is that's what insurance customers want, too: to incur arbitrary risks and have other more responsible customers pay for them.

If you could sell your car for a million bucks, you would. So would I.

What prevents it is there are no customers willing to spend $1m on our cars.

This is the Law of Supply & Demand, and how markets work.

Businesses want to maximize profits, but an insurance company that doesn’t pay claims will quickly have no customers.

That's why we regulate insurance companies in a way not particularly comparable with other businesses.

You (say) have a trampoline. I do not. We share an insurer. Our insurer asked, when you applied, if you had a trampoline. Your trampoline materially increases the risk that insurance is going to have to pay to cover a lawsuit on your property. You lied, and said you didn't. I am now paying to subsidize your trampoline.

Why shouldn't I want them to be running drones over our houses? Worrying times... for pirate trampolines!

Wouldn't said trampoline simply not be covered by the policy since you lied about it? The agents are checking a box and the underwriter is sticking in a boilerplate "Customer said no trampoline therefore trampolines are excluded from this policy" text

It depends on the policy, but either way, this is the kind of risk we're talking about managing with culls: trampolines, and bad roofs. I pay to keep my house up. You (say) don't. Why should I be OK with subsidizing your resulting claims with higher rates?

I think there's a sort of weird subtext in the "risk pooling" discussions on this thread that "risk pooling" is a way for people who don't replace their old roofs to get protection from the people who do. But that's not at all the concept! You refusing you repair your roof isn't an act of god; it's just recklessness.

It’s worse than that actually; say the liar’s house burns down and the insurance adjuster finds the trampoline in the garden after the fact. As I understand it, the insurer can void the entire contract.

> Wouldn't said trampoline simply not be covered by the policy since you lied about it?

This doesn't stop expensive lawsuits, even if they ultimately don't pay the claim.

It would be hard for the insurance company to prove that the head injury was from the trampoline rather than tripping on the porch.

It increases the chance of a claim against the homeowner insurance if a neighbor's kid gets injured on your property. Even if it ultimately will be on you, the insurance company will likely get sued and may settle which increases costs. They'd rather go the cheaper, drone surveillance route to find offenders early and warn them or else.

Trampoline is a bad example. Pool is not. That could threaten your house’s structure, or cause damage to your neighbour’s in a storm. The article gave an example of an overhanging tree—it makes sense for the population to segregate into those who will manage that risk and those who won’t, with the latter being charged a higher premium.

> Why shouldn't I want them to be running drones over our houses?

Because it’s creepy.

at least in the United States, home insurance is issued a year at a time. So it doesn’t make sense to cull today in anticipation of some hypothetical future shift towards cataclysm.

Also, what is the aerial photo of a roof going to indicate in terms of “cataclysmic climate events looming”?

Also is it a coincidence or a pun that your name is worik and it is common for you to sign your posts with something about worrying?

Lol my dude, trampolines in backyards being a rejection reason has nothing to do with climate change.

Yes climate change has caused an upheaval in some geographical regions.

But there are many economic forces at play, from the treatment of real estate as an investment making every home a million dollars to insurers all being reinsured by a ever smaller pool of reinsurers.

I saw one case where a guy was dropped because of an aerial photo of a pile of junk in his yard. I’ve had piles of junk in my yard during various remodeling projects. If the satellite passes over the day before the dump run, there’s no way to tell that the junk was gone the next day. If there’s an inspection, it’s easily explained.

I suppose you could offer an explanation for the satellite photo, but in that case you’ve already been dropped, so getting your policy reinstated is going to be a much bigger lift.

You're supposed to notify your insurer when you remodel!

Given that my insurer has never once stepped foot in any property of mine they've ever insured, the idea that I have to tell them when I replace the tiles in the bathroom seems a little ... crazy.

Obviously, if I add rooms or extend vertically, they need to know. But "remodel" covers a lot.

Ok, “remodel” was maybe not the right word here. Projects large enough to generate a sizable pile of junk, but not ones that materially altered the structure of the house. Replacing built-in shelves with a built-in desk, replacing a non-elevated deck without altering the footprint, etc.

My point is more that a totally reasonable and brief occurrence becomes permanent and without context in satellite imagery.

I think that one difference might be that physical inspections don't scale. It seems to me that the current systems working (for regular people) requires that insurers not be too good at assessing risks. The better the insurer is at assessing risk the closer insurance gets to providing no value to the insured.

Insurance can provide value even when risk is assessed perfectly! If everyone has a 1 in 100,000 chance of a $100,000 damage incident, they will have to keep $100,000 of savings to make sure they can avoid becoming homeless from an accident. But by paying $1.25 in insurance, (25% profit to the insurer), they can use their $100,000 for other purposes and generate much more than $1.25 in income from it.

Not Quite - only if risk is spread across the whole pool does it provide the value you describe.

If risk is assessed perfectly, they know that Alan's & Charles' houses will not have a fire, but Bob's house will burn. Alan and Charles (and all the others) pay only the $0.25 overhead/profit, while Bob must pay the $125,000 ratings +profit.

Insurance basically disappears, as it adds no value, and we go back to being self-insured.

In terms of sheer game-theoretic value, sure, perfect knowledge will reduce value gaps. However, the thing with having your house insured is that you will have somewhere to live if you have a house fire. The +/- for the insurer might be close, but going from having a house to having no house is a bigger deal than going from one house to a twice-as-expensive house.

Insurers don't on average provide value. If a risk can't be assessed, they will only offer a policy if they think it's value to them at the price they charge.

Insurance is famously negative EV (in dollars, if not utility).

An insurance company should be required to go through a legal process before they are able to drop people.

Sure, an undeclared pool is a problem. However, the insurance company should have to put the pictures into evidence and allow a legal rebuttal. Bureaucracies get things incorrect like "wrong address" all the time. People need the right to challenge these behemoths.

We've been through this once already in the US--it was called "rescission" in healthcare until the ACA made it moot by requiring coverage of preexisting conditions. It's a bad thing and invariably needs to be made illegal.

We require coverage of preexisting conditions in a bargain that involves coverage mandates (since struck down) and continuous coverage / enrollment periods. And health insurance is the primary payment gateway to a deeply distorted market that relies utterly on insurers to take payments, which is not something that is true of the housing market. I don't think I have too much of my identity invested in whether homeowners insurers need due process to not renew contracts, but I guess I'd argue the other side of that one. Either way: hard to see the privacy issue.

Demanding an inspection is a process that can be organized and scheduled around.

Your friend brings over a trampoline for Timmy's birthday party, you can take the risk of injury with no intent to claim on insurance. You can remove it before inspection.

Now you get pinged out of the blue by a satellite.

Adults don't need constant supervision. Should you believe they do, why not leave a multi-camera drone above your suburb and every insured house can be monitored for infractions 24/7.

There is no reason for the insurance company to withhold the image as evidence of a problem. Google Maps knows where my trampolines are, why is the insurance company hiding their cards?

An insurance company that surveils you 24/7 and makes sure you comply, is not covering any risk, it's a protection racket.

You can remove it before inspection

Yes, if they do a scheduled inspection, it is easier to defraud them.

A trampoline used with no injury, is not defrauding the insurance company.

I'm sorry but this comment makes no sense. Where did you get that insurance companies are now "surveiling you 24/7"?

If my insurance goes up, and it has, because of people defrauding insurance companies then I would fully expect my insurer to protect their bottom line and my rates by dropping those customers playing unfairly.

What I don't agree with is insurance companies punting the decision making process to an algorithm. At that rate we end up with Google "support" from a company that, as paying customers, we should be able to have a conversation with.

The last thing I'll mention is that it goes a long way to know your insurance broker. As an example I've known mine for the last ~15 years and they have helped remediate a number of, what I'll describe as standard process issues, when I've contacted them and in a few cases even proactively.

It was a rhetorical question. Why not increase surveillance to 24/7.

There is no defrauding going on. You don't own someone's behaviour or property simply because you "insure" them.

You get to reject claims and put your opinion on what "fraud" is, through the proper channels.

Taking photos and dropping customers is going around the proper channels and tyrannizing your customers.

How that is not obvious to everybody involved, is beyond me.

Drop the pretense and install a command economy again like the 1940s. You are leaning in that direction anyway.

Do you really believe that a majority of insurance holders own their home outright? They don't. Which means a financial institution, other than the "home owner" does. That loan binds the "home owner" to a set of responsibilities - one of which is keeping the home insured. This isn't a new phenomenon.

Taking photos from public airspace isn't "tyrannizing" anyone, as much as you seem to want it to be.

> You are leaning in that direction anyway.

The irony...

In these cases, the argument is always of the type you just mentioned.

“What’s the big deal the data is already available, relax”. On top of that, it comes with an air of condescension as if no one had ever thought about that before.

One concern with things like this is that it’s different when you have to send someone out to inspect a home vs inspecting thousands of homes at a time. Once you have data in that volume, you can start to infer things that do borderline encroach on privacy.

What is the case here, and it might be what you were trying to point out, is that this kind of data is already collected regularly and is by the books legal. The concern here is simply at the application.

At this point the cats out of the bag and the best we can hope for is at least some level of protection through legislation.

Again: insurers can and do demand home inspections when underwriting. This is strictly less intrusive than common existing practices in insurance.

The irony of starting a comment with again when you yourself didn’t read the reply.

I acknowledged that all this info is already out there.

That insurance companies can demand to inspect your home.

And even further that that this aerial footage is already widely available.

My comment was specifically calling out that collecting data one house inspection at a time is different than collecting data at high volumes.

But let’s gloss over the fact that someone didn’t even fully disagree with you, but even then you couldn’t get over that one point that you didn’t like.

I used to work for Verisk, an insurance tech holding company, who owned a company that took pictures of people's roofs using airplanes and special cameras. They got sued over a patent violation with EagleView[1], who claimed the tech idea as their own, and settled.

> The strategic alliance allows customers seamless and integrated access to EagleView technology within Verisk’s Xactware platform

Xactware is a product that customers (read: insurance companies) use to figure out how much money to pay on a claim.

The whole idea is to speed up the claims process. Insurance agents don't need to go out to people's houses to examine roof damage. But we also had a department doing some pretty sophisticated stuff around preventing claims fraud, so I'm not surprised.

1: https://www.verisk.com/company/newsroom/verisk-and-eagleview...

I recently started going through many big data collectors and expressing my rights to know, delete, and stop selling my information.

Verisk makes the process notoriously difficult compared to other companies, you have to start an "ethics" report in their ticketing system

https://secure.ethicspoint.com/domain/media/en/gui/69464/ind...

I’ve thought about doing this myself and I wish there was a service that made it easier.

The one thing in the back of my mind is also that there’s a risk of this backfiring over time. When you are unknown to potential creditors, employers, etc in whatever platforms they choose to use to look you up, that’s the ultimate sign of risk.

Yes. Similar to being a young person trying to establish a credit history, if there is little to no info to go on companies will tend to assume the worst about your riskiness and charge accordingly.

Real question: is something like aerial photography of your roof really subject to privacy laws?

IANAL, but in the US, it depends on whether could have reasonably expected that their stuff was hidden. If your roof is sloped so that a person on the street could get the same information by walking around the block, then aerial surveillance is just a faster way to get that public observation.

In contrast, if you set up a high fence around your pool in order to sunbathe naked, aerial photography would probably be an invasion of your privacy? If your roof was designed in a similar way, one might be able to argue it was wrong for the company to observe aspects of it without permission. (Although they might have gotten permission via the insurance contract...)

I think this legal standard becomes tricky (or at least ought to receive more scrutiny) when we start talking about pervasiveness and permanence. Just because I know that an arbitrary person might take a picture of me in public doesn't mean I expect every single thing I do outside to be recorded forever by a technological invisible stalker hovering over my shoulder at every outdoor moment.

Privacy in the US is defined as property rights, and your private property does not extend infinitely upwards into space. Anything over a certain high is public and regulated, and so if it is visible from above, it is not protected.

Otherwise, it would be illegal to fly a plane or even a hot air balloon pretty much anywhere, and even things like google maps satellite view couldn't exist.

I work in privacy (as a dev, so the breadth of my knowledge isn’t necessarily comprehensive), and to my knowledge there’s no privacy regulations that would prevent this. Effectively, they’re saying that the roof at a certain address is in a certain condition. I don’t see how that could be considered personal data.

Why is that the real question? Shouldn't the real question be: do we want, as a society, to allow something like arial photography of your roof freely accessible to data brokers so that they can form a shadow profile of you and determine how much you pay for insurance?

That a law against such a practice does or does not exist today is rather besides the point.

No.

Is there a list of companies out there you can share, or are you going about it on your own?

> I recently started going through many big data collectors and expressing my rights to know, delete, and stop selling my information.

Can you share how to go about it? Do you have a blog post?

Did either of the parties move to invalidate the patent claims as obvious as, say, a camera on a stick or a toy airplane with a camera?

I'm less concerned about the spying and more concerned about insurance companies arbitrarily non-renewing policies with no recourse for the consumer. Insurance is heavily regulated for good reason, and insurance should be a source of stability instead of anxiety.

Alright, I spent years working and building 0-1 insurance products. Let me peel back some stuff that’s been happening behind the scenes.

Some officials are elected and some are appointed which all depends on the state. Appointed officials are usually more reasonable and elected are not because higher rates = mad voters = re-election chances lower.

For a long time, insurers have struggled to get sufficient rate changes approved. A literal quote for you during Covid was, “Son, I’m looking out my window at downtown {city} and I don’t see many cars on the road. We won’t approve the rate increases.”

This was with actual data of losses increasing due to supply chain disruption of auto parts, labor increases and many more things.

We basically had to write policies and hope for the best despite knowing the data / trend lines forecasting major losses.

Fast-forward and what do you have - major losses by all of these companies - and so these companies have two choices: - Try to get rate approvals - Exit the market or line of insurance

For California, the latter is the better option because at least for auto you cannot use credit, telematics or other very predictive attributes to price the risk. This results in essentially pooled risk which in aggregate drives up rates for all. Simply put, California officials did this to themselves.

For other states, the first option works but the rate increases are now significantly higher because it was near impossible to get any adequate rate increases last few years.

So, the bill has come due and it sucks for everyone as it’s either a) higher prices or b) can’t get insurance (Florida folks for certain types) or c) limited suppliers not being able to get reinsurance to share the risk results in higher rates that customers can’t afford so they go without.

Here in British Columbia, our provincially owned insurer (ICBC) saved significant money because of fewer claims during Covid. They even issued a rebate to most drivers. Though they also noted losing some revenue due to fewer or lower premiums being paid. The amount saved was far greater.

https://assets.ctfassets.net/nnc41duedoho/BNR4qtOTGPJuyQADtK...

I wonder if the difference was largely because of Canada's more strict lock downs. The roads were nearly dead here for quite awhile.

Why are insurance rates regulated by the government?

I understand that the state has a strong interest in ensuring that insurance companies are adequately capitalized, but I don’t understand the state interest in directly regulating premium prices. (Or is that not what you are referring to?)

One key part of the formula omitted is most major insurers while posting underwriting losses in certain markets, etc in 2023 posted annual net profit over $1.0bn. Am I right in thinking these sweeping rate increases and market exits are justified by protection of $250mm+ per quarter net income? If so, then are we right to blame anybody other than the insurers shareholders and owners for this current state? Wouldn’t $25mm per quarter net income be sufficient? Why does runaway profits maxxing have to apply to every market including public good markets like insurance?

I’m not seeing you motivate or justify the rate increases.

> This results in essentially pooled risk which in aggregate drives up rates for all.

For all? I'd think it reduces rates for some and increases it for others.

Hi, This is a very informative post. I am trying to learn more about how the insurance industry works. Would you be open to sharing any resources (websites, books etc) that teach the 0 to 1 of insurance? Or can I DM you with a couple of questions? Thanks!

> supply chain disruption, labor increases

All of these things have either reduced or stabilized over the last two years, but prices seem to keep going up. Strange!

I thought risk pooling was the point?

And yet there's seems to always been enough money for stock buybacks and disgustingly excessive executive compensation.

I'm not usually a "actually this is the fault of regulation" sort of person, but in this case it really is the fault of regulation. A bunch of states have laws saying premiums can't rise more than X% in a year, or can't rise at all without the approval of the state insurance commissioner. If circumstances have changed (e.g. wildfire or hurricane risk is now worse than we thought, and also labor market tightness and inflation means repairing/rebuilding is much more expensive) such that the insurance company can't insure you profitably without a rate hike they're forbidden to do, then of course they're going to drop your policy.

No one, including companies, should not be forced into contracts they don't want to enter into.

In practice, you are going to find they are never arbitrarily doing it. They are doing it because the price no longer covers the cost of providing the insurance. Just like when I decide the price of X isn't worth it anymore, I stop doing the transaction. The reasonable response would be to increase the price, but in some situations it's not possible due to regulation.

Except when those companies have lobbied to create laws to make the use of their industry mandatory.

This sort of opportunity to find a rationale for cancelling an individual insurance policy will inevitably by used for evil. See: Insurance Redlining.

Or you thought cancelling cable was hard now…

In some states it's the heavy regulation which is causing policy non-renewals. When governments fix prices below the market rate that inevitably leads to shortages.

It's a stressful situation for many property owners. They may not realize the impact that recent high inflation has had on repair costs, especially when prices tend to spike up higher after major disasters.

I don’t think insurance companies should be forced to protect you from your own outsized risk taking at a government capped price.

Nobody can be forced to insure you if they don't want to. I learned that on CNBC the other day, here's the segment talking about the state of home insurance in US.

https://www.youtube.com/watch?v=xw8fpEpwMzA

Thats exactly the problem with insurance.

If I have any sort of risk mitigation (file backup, fire alarms, spare tire, a generator, whatever) I can test that it works periodically. So I know I'm actually safe for the event.

For insurance, you can't know what bullshit they'll come up with to deny a claim when the time comes for it.

You're left with having paid for the insurance all that time for nothing! Much better to have put that money in a piggy bank instead.

I’ve known plenty of people who had legitimate accidents not of their own fault where insurance made them more than whole, and they would have not been able to afford the replacement if they had simply been saving for the same amount of time.

If you actually feel like you could recoup of the cost of paying for insurance by instead keeping the money in a piggy bank, you are buying too much insurance. There’s a sweet spot for insurance and overpaying for too little insurance is a you-problem.

Well technically you were paying for their obligation to pay for you. Which is a real thing of value.

You assume it’s bullshit. Difference.

Do you live in CA? In recent years that's the majority of arbitrary cancellations I've heard about - companies pulling entirely out of CA.

I 100% agree with landedgentry. I don't really have any problem with insurers using drone photos - anyone can take drone photos of anyone else's property - and I'm not really a fan of the article calling it "spying" to imply some special kind of nefarious behavior.

But I do think the total bullshit is that companies are just using it to come up with essentially fake reasons to drop customers:

> Cindy Picos was dropped by her home insurer last month. The reason: aerial photos of her roof, which her insurer refused to let her see. ... Her insurer said its images showed her roof had “lived its life expectancy.” Picos paid for an independent inspection that found the roof had another 10 years of life. Her insurer declined to reconsider its decision.

I also don't have a problem if an insurer decides to leave a state entirely - that decision is essentially saying the state has made it impossible for them to adequately price risk, and that's something the state should fix if so desired.

But these BS cancellation reasons seem like a case of insurers wanting to have their cake and eat it too. I'm not very familiar with state-by-state insurance law, but I'm assuming they have to come up with some reason to drop a homeowner that already has a policy, so this looks like they're trying to find BS reasons to just drop potentially less profitable parts of their portfolio.

Similar reports are coming out of Florida. Generally, it seems the industry is pulling away from higher risk to climate change issues from larger storms or fire risk.

But, profits.

How else are execs going to pay for that third vacation home?

Does that third vacation home get spied on from the sky as well?

Can’t really force people to do business like that…

What you can do, which the U.S. already does, is government-run insurance, socializing the losses among a population. Flood insurance, for example.

> If your roof is 20 years old and one hailstorm is going to take it off,

It amazes me that people in the US would even consider installing a roof that would only last 20 years.

In the UK, you wouldn't consider reroofing anything that your grandparents remember being installed. Ie. Stuff doesn't get reroofed till it's 100 years old. Even then, you'll normally inspect and only replace the damaged bits.

My 350 year old house still has part of its original roof and slate tiles etc.

It’s called “money.” That is the reason. Slate roofs are common in the UK, and using synthetic slate is $7-12/sqft, whereas bitumen/asphalt shingles which are common in the USA cost $0.50-$1.00/sqft. Average home in the USA is 2,200 sq ft with a roof size of 1,700 sq ft. So $1,700 vs $11,900 is quite a difference (and that was being most generous, excluding installation costs, etc) So basically, average person who owns a house has a big house, and big roofs are already expensive. Regardless of wanting to get a high quality roof that would last more than 30 years, that requires capital - more than the average owner really has access too. Sources: https://www.architecturaldigest.com/reviews/roofing/slate-ro... https://www.architecturaldigest.com/reviews/roofing/shingle-... https://www.rocketmortgage.com/learn/average-square-footage-... https://www.rubyhome.com/blog/roofing-stats/

Materials may cost that, but you are not getting a roof replaced for $1,700. Maybe $17,000 and even then it’s pushing it on the coasts especially. Labor and other overhead costs have really gone up and contractors don’t want to deal with small jobs. Sad really.

I’ve never seen slate roofs in California, so not sure if these are to code here. We looked at metal and other materials, but the problem is the weight is different, so now you are engaging an engineer to evaluate structure, submitting plans, dealing with code updates. Or just new asphalt shingles every 15-20 years. The payoff isn’t there and folks don’t tend to keep houses for generations, unlike in the UK.

Also the cheap materials roof weighs less, and so the whole building under the roof can get away with being built cheaper.

In order to have a better roof, you probably must have a better entire house under it also.

>that requires capital - more than the average owner really has access too

It sounds odd to my ear to matter-of-factly state that the US is deprived due to being capital-poor.

I mean, I'm not disputing anything specific, but where do middle-class people have better access to consumer finance than the US?

If you'd asked me what single fact represents American homeowners to people interested in economics around the world, I would've guessed it's the access to 30-year fixed rate mortgages.

As far as I know this is a deliberate policy in the US, that has not been emulated by those envious of the American economy, but why I haven't a clue.

The UK has a massively milder climate than most of the USA, which provides significant assistance to things lasting.

As I noted in another comment below, roofing slate is essentially unavailable in the USA due to geology - what does exist is of much lower quality than a good welsh slate. Still, in some ways I agree with you: roofing materials in general in the USA are far less durable those used in the UK and Europe, for reasons that I don't entirely undestand.

That said, it amazes me that huge numbers of people in the UK live in essentially uninsulated and almost uninsulatable buildings. Sure, winters are mild, but anytime you have the heat on in the millions of homes built post-WWII, a huge amount of is just leaking through the brick walls. US stud framed construction has its problems if done carelessly, but it does have the benefit that its easy and obvious to insulate your walls to some degree, and not hard to do it to Passivhaus standards.

> The UK has a massively milder climate than most of the USA, which provides significant assistance to things lasting.

That makes sense. Roofs last a pretty long time in the PNW as well, for similar reasons. Mostly we just get rain. Not a lot of particularly hard freezes, our idea of big hail is 1/4 inch, etc. It's pretty routine for a garden variety "25 year roof" to actually do all 25 years, and even 30.

If you think that's wild, consider that the standard practice in Japan is to buy land and build new...even if that means tearing down the building that is currently built there. As a result, buildings are built more according to the rules of fashion, and building to last longer than the current occupant would seem like a foolhardy waste of money.

Although one thing to keep in mind is that earthquake-proofing building standards are also renewed about once per generation. I would absolutely refuse to let my family live in a house built before the post-Hanshin 2000 reforms (just look at the houses collapsed in the recent Noto earthquake, most of them predated even the earlier 1981 reforms)

My house is about 100 years old and still has the original concrete tile roof, with a stack of spare tiles under the house ready if needed.

An extension that was done in the 1980s has had to have its roof replaced once already due to what I have to assume was poor workmanship by the builder.

US has a lot of different weather patterns than the UK. UK sits at a latitude similar to that of states like Washington, Montana, and North Dakota. The choice of roofing materials is also influenced by building regulations and codes, which can vary between countries and even within regions, dictating the use of certain materials for fire resistance, insulation, and other safety and performance standards. Cost-effectiveness is a factor. Like Florida with crazy hurricanes, no reason to be spending money on something besides asphalt architectural style shingles. Some people do get metal roofs. But if its going to get blown off, then why?

>Like Florida with crazy hurricanes, no reason to be spending money on something besides asphalt architectural style shingles. Some people do get metal roofs. But if its going to get blown off, then why?

Tile and metal roofs last much longer than asphalt roofs in Florida, and while it's definitely more up front, they're generally more resistant to extreme weather (tiles are very heavy and metal is generally fastened down very well) and may get you an insurance discount. It's also for aesthetic reasons, as tile roofs are a very classic Florida look, and the stereotypical Key West house has a metal roof.

Has your 350 year-old house been hit by hail, some of which is the size of golf balls, in enough volume that the ground is as white as if it had snowed? Because that's a not-uncommon occurrence here in the midwestern US.

Ceramic tile and concrete tile roofs will survive that, and are also common in the UK. (Although tend to be only ~150 years old by now)

The weather in the US can be wild compared to what Western Europe is used to. England doesn't have to deal with the same events.

Those Ukrainian concrete buildings can take a bomb and still stand...

Different types of storm are one thing.

I think the biggest difference, though, is that the stereotypical single family US home of the 19th/20th century US expansion is on a large plot of land and has - so far - been one to get remodeled/expanded/revised several times in a hundred years. Houses are generally treated as mutable things, and people also often expect to move within a few decades, spending more to put in something that will hold up a hundred years instead of twenty seems foolhardy to many. If you sell it the buyer will likely want a cosmetic refresh; if you keep it, you likely will too.

That sounds very nice. What would a competitive rent for your house be? Is it near London?

For Americans who don't know anything about housing in the UK, there is an interesting article at: https://en.wikipedia.org/wiki/Council_house

Being Wikipedia in 2024, I wouldn't assume it's not all AI hallucinated references, but still, it's interesting.

No one is building homes to last 150 years in the United States, and very rarely do people want to buy homes built a century ago.

Where I live we call a century-old home a "tear down" because it's probably in horrible condition. There are a handful in my neighborhood but they get sold at a discount, usually for new construction.

That's wild. I live in one of the oldest cities west of the Rockies (granted, that isn't -that- old) and there are whole neighborhoods of century homes, and they're considered desirable. In the last 10-20 years a bunch have been gutted and upgraded -- new pipes, wiring, windows, etc. Maintains the charm but modern efficiency, convenience, and safety. Sure, some become tear-downs, but a pretty high percentage are sticking around. That old growth doug fir is awesome.

I just sold a century home myself, after my mother passed. There was a little bidding war for it, even in this market. There's a character to the century homes that you cannot get in a new home at anywhere near the same price point.

We are sprinting towards a dystopia of "computer says no". Decisions taken affecting your life and finances made by computers delivered by minimum wage powerless staff.

I'm sure healthcare insurance companies are inspired by the actions of the home insurance companies. "you declared you never smoked but our drone footage shows you and a plume of smoke in the same area. The AI detected it as cigarette smoke. Your coverage is cancelled and this is our final decision. "

Insurance works on the basis of (a) quantifying risk and (b) charging fairly for the protection. In the long-term, getting better at (a) and consequently, (b), is in everybody’s interest. For far too long, certain risk covers have been under-charged. At the end of the day, difficulty in finding affordable insurance, or any insurance at all, tells you something about the level of risk and the ability of insurers to charge appropriately for it. Regulators are often way behind the curve, to the detriment of insurers and consumers.

Climate change is coming for America’s property market Insurance is supposed to signal risk. Policymakers should let it https://www.economist.com/leaders/2023/09/21/climate-change-...

Parts of America are becoming uninsurable Blame growth in hazardous areas, climate change and bad policy https://www.economist.com/united-states/2023/09/21/parts-of-...

If this were true, health insurers would have taken a cudgel to the US hospital system decades ago and come up with a more efficient system. They haven't because an opaque system allows them to maintain their own opaque practices.

Health insurance companies don’t care about what your doctor earns in the same way home insurance companies don’t care about the cost of the roofer. They’re going to price in whatever that cost may be and call it a day.

Health insurance has it easier too because there’s not really a concept of correlated risk in human populations. Most people do a decent job avoiding hurting themselves but when a flood comes, there’s not a whole lot anybody can do.

Health insurance companies do actually care, unfortunately. They're incentivized to embrace higher prices since they have to spend at least 80% of premiums on payouts. If you have a fixed margin, well, you have to increase premiums to increase profit, so higher prices means more profit.

COVID?

Property insurance and health or life insurance are very different markets.

And (c) in the long term influence the risk. Insurance companies have long worked to improve auto safety. This benefits everyone. This needs to be applied to more significant risks, like fire flood and storm.

I think we have to get much more serious about prevention. People are doing this:

Fire safety:

https://www.npr.org/2023/08/24/1195331310/red-roof-house-fir...

Storm safety:

https://abcnews.go.com/US/mexico-beach-home-survives-hurrica...

We need to mandate this kind of building in new construction and modified construction.

It may be worthwhile to subsidize this, to help with turning existing high risks into low risks.

We need to be more severe on forbidding building in danger zones, and more accepting of insurers pricing these based on risk, so they don't have to leave the state, and others can be priced to more common levels of risk.

We also need to not allow rebuilding in areas that will have these problems again, without some way of mitigating. We should not have to pay for someone's third house in a flood zone. But if you can make it flood proof after the first one, great.

> This needs to be applied to more significant risks, like fire flood and storm.

It is. The NFPA (National Fire Protection Agency) writes the National Electric Code and other safety codes that get adopted into law as building codes. It was started by a coalition of insurance agencies.

https://en.wikipedia.org/wiki/National_Fire_Protection_Assoc...

Auburn, California, is a mistake and should be uninsurable, and I don't want either my tax dollars or my insurance premiums being used to subsidize the treehouse lifestyle of exurban home owners. Whether this specific person's roof is rotted or not isn't really the point. Right now, the real estate sprawl industry is running their printing press at 110% design speed, trying to convince everyone that people who live on the fringes of civilization are getting a bad deal. But from where I sit, in a fireproof building downtown, I see it differently. We need a massive correction in California, under which we stop subsidizing the firefighting, insurance, and roads that serve the sprawl.

The subject property, by the way: https://www.google.com/maps/place/2350+Buttes+View+Ln,+Aubur...

I can understand feeling like both taxes and insurance premiums are too high, but the ability to make choices other than the specifically least risky one is one that fundamentally allows us to exercise our free will.

Those in Auburn are, by the same idea, subsidizing windows that get smashed when parking downtown, or even if you walk, the extra risk that you are hurt by someone while walking in a place with more crime per square mile.

You can live far away from a downtown and have to get your car smogged, because we wanted cars in the cities to provide for clean air.

I don’t mean we need to accept all risk in society, but for me there’s a very worrying trend against ANY risk/cost that doesn’t directly benefit the person advocating against it.

Ultimately I know it comes back to the current economic situation, because if everyone feels like they’re struggling there’s less thought to care for others.

The problem is not the sprawl, it’s the out of control construction costs due to regulation and insurance premium caps due to… you guessed it - regulations

>If satellite launches go as planned, images could be updated daily by 2030, according to Neil Pearson, a consultant who works with imagery companies.

>"It could get interesting from a privacy standpoint as... a property could be monitored daily at high resolution," he said. "It is a bit Orwellian."

https://archive.is/SSXdN

Vexcel doesn’t use drones. They use manned aircraft. Drones are almost never used for insurance. There are a couple of companies that do, but the costs are still too high for it to make sense.

I don't think the problem people have with this is the type of air vehicle used to take the picture

Surprisingly, it seems to me that you are wrong. People will absolutely lose their minds whenever they hear about an unmanned aircraft, but never talk about manned aircraft. There have been tons of news articles about "police drones" an other kinds of scaremongering, that never seem to note that the cops using an airplane to follow you in the dark has been a thing for decades. The only new thing is the pilot does not necessarily need to sit in the aircraft.

Haha exactly. Same thing for military drone strikes. I've noticed way too much of the debate focused on the "drone" part and not the "hey do you have an adequate process for target selection, civilian review, and consequences for targeting the wrong people?" The specifics of the hardware should be irrelevant to that question.

I would definitely mind if the police were following me personally in an airplane…

Did you recently rob a bank or carjack an old lady? If not, I sincerely doubt that anyone would go to the trouble of following you around.

I suspect the only reason they don't use drones is range. Once they have a match, it'll be drones all the way.

Works where archive.ph is blocked:

https://cc.bingj.com/cache.aspx?d=1812931943850&w=GaxRXZW2Vc...

Much appreciated

I wish insurance was more flexible with risk and deductibles, 20 year old roof, your deductible is 20000, 5 year old roof your deductible is 500, something that equalizes the risk without the need to drop customers. Heck I would self insure or set an extremely high deductible for rebuilding, but I still need coverage for any liability risk like when the mailman trips on my sidewalk.

That's only possible when the regulatory environment allows it. If your insurance regulators won't allow that kind of flexibility, then they have to look for other options.

This is often approached through the lens of consumer protection. As a result, making thing flexible to allow insurance companies to say "Hey, you really need a new roof, but if you choose not to here's the price of that risk" is not prioritized. Approving rate increases is.

You can get basic liability coverage if that’s what you desire. But be prepared to pay out of your pocket in case of total loss. If you have a mortgage you’re almost certainly required to hold coverage.

This aerial stuff now enhanced by AI is a privacy rights nightmare - in Australia, local councils are utilizing high res images shot by plane, which are AI analysed for infractions - ie. Illegal outbuildings, cut trees, earth works greater than a metre in depth, solar panels placed without auth etc. This kind of tech is going to be abused by both the private and public sector to no end. The images have a resolution to the point where veins on a tree leaf are perceptible.

We are literally going to be monitored from the sky by AI for a lot of things, and from a legal standpoint at this stage there is nothing to stop anyone from doing it.

(Am Australian lawyer) there's no privacy recognised in any of those things you're talking about. Simple solution is don't lie to insurers or the government.

Of course we can elect politicians that change the law. Might be a hard sell if the motivation is to stop detection of illegal things.

Sources: (no general right to privacy) https://en.m.wikipedia.org/wiki/Victoria_Park_Racing_%26_Rec...

The Privacy Act (https://www.oaic.gov.au/privacy/privacy-legislation/the-priv...)

Haha, by your reckoning why not monitor all comms for any lies? This is why we can’t have nice things. We are walking into a new Robodebt scenario run by AI - it’s all too much living in a constant state of surveillance and it’s not a world I want to live in.

This is not a technology or privacy problem - it's a legislative one. If it's illegal to do X, then it seems reasonable for the gov't to enforce that - the more efficiently the better. And if enforcing it seems wrong, then maybe it shouldn't be a law.

For another toy example, what if speed laws in the US were fully enforced 100% of the time - they would be yanked immediately, because they are dumb and mostly just used to fund the police. We only tolerate them because they aren't enforced on us very often as individuals. It's like a medium-skill lottery to see who pays for the police.

The technology is an enabler and it creeps into everything and before you know it we are where we are today.

> what if speed laws in the US were fully enforced 100% of the time - they would be yanked immediately, because they are dumb and mostly just used to fund the police

Or maybe people would adjust their behavior and respect speed limits? Laws that are sporadically enforced at the discretion of police officers are awful. It just enables discrimination.

The US is very lax about enforcing speed laws compared to other countries.

Compare to somewhere like Australia where you get fined for just going a few km/h over the limit and the use speed cameras extensively.

https://www.qld.gov.au/about/newsroom/increased-penalties-fo...

Whereas it seems to be common in parts of the US for everyone on a freeway to be 10 miles/hour over the limit and nobody cares

Even if you can't get insurance covering the roof, then ask for that to be an exclusion so you can get other insurance covering your home. Personal liability from lack of insurance can bankrupt you.

Allstate refused to offer a policy quote because my house is fuzzed out on its street view photo from 2011.

A legal question here: are we allowed to shoot down a drone that snoops over our house?

Full choke and magnum turkey loads.

If that doesn't work, there are tutorials on YouTube for building guided anti aircraft missiles.

Just get a high powered laser and burn them, if its good enough for the US military its good enough for me.

just in case this is serious, no

My good friend works as an insurance agent. According to him, insurers are dropping customers based on anything right now. It’s caused chaos in the agency business, particularly in certain states.

My bet is aerial images are just one way of many that they’re dropping customers.

I'm not sure the degree to which insurance companies are legally allowed to share information such as aerial photographs with each other.

When I worked at Google I knew a developer who was building a prototype service similar to Google Flights, except for auto and home insurance. I don't think that product ever shipped.

The dev on that team told me that a key thing they learned while doing the analysis is that the optimal strategy with auto and home insurance is to automatically switch providers whenever it's time to renew.

It could be because your current company has collected things about you that they aren't allowed to share with other insurance companies.

I think the most common reason is that insurance companies try to attract new customers with lower rates / discounts and welcome gifts. Switching every year means a new insurance company spends their acquisition money on you every year.

Yeah, people like to think there’s all kinds of grand conspiracies out there when it comes to insurance companies. But they’re all actually very, very boring. All of these pricing algorithms are filed with the DOI, and are public. There is nothing crazy in them. The reason prices to go up at renewal is because that’s just the optimal economics of insurance companies. Get you in at a competitive new business rate and then increase rates at renewal to offset the losses that new business policies incur.

The product the OP is talking about made quite a buzz in the business when it was first released (I do think it came out for a while). It was a price comparison tool, and the reason it failed was because it was hard to get the big brand names on board. The big brand names didn’t want to compete on price alone, because they spent so much money on their brand. They already had a ton of customers coming straight to their website.

Sorry for any formatting or spelling issues here, I’m using voice to text.

It's not to always switch, but to re-quote all competitors. Most insurance competition plays out on two factors:

- What companies the customer quotes - What amounts they are offered

You should always quote competitors because stuff changes and there are sign-on discounts offered as well.

https://www.comparethemarket.com/ is the best known comparison site for insurance in the UK.

Is there not an equivalent in the USA?

Each state has its own market.

Related idea:

https://news.ycombinator.com/item?id=36268907 ("French tax officials use AI to spot 20k undeclared pools (2022)", 166 comments)

It's been happening for years. Anything to limit the number of onsite visits needed because that takes a lot more time.

I know insurance brokers who have revisited a clients renewal, because Google Maps and/or the council's GIS photography shows activity or buildings counter to the client declarations. Is it a final decision? No. It's used to prompt the client to review their coverage and amend their submitted documents. Sometimes, those amendments mean the brokers are no longer able to get coverage, and the clients go somewhere else.

My insurance company asked me for photos of our roof to prove it was metal and not asphalt. From a distance it looks like asphalt because it is metal with a stone grit coating just like asphalt. Could a photo from a drone see this?. Maybe. I also live under the final approach flight path of the local airport so maybe they couldn't verify using their drone.

Related (2010) on finding untaxed swimming pools on Long Island using Google Earth: https://www.nbcnewyork.com/news/local/heads-up-google-earth-...

Interesting to see this pop up on HN. I once did some work with a large international data broker who had recently acquired a company which specialised on aerial photography and ML for identifying potential insurance risks.

I'm an infra guy by trade and really enjoyed learning about the tech while on their team. Mind blowing stuff to me!!

This tech implementation seems like the worst HOA on steroids. Anyone have a neighbor that complains about one too many daffodils in the mandatory daffodil plot? Well, now they have a new tool for compliance.

The problem with aerial photos is that not always do these photos provide enough detail they can provide deceptive data. It is better if insurance companies send field workers to check the premises.

Can someone explain to my house insurance is so important? I live outside USA and I never bought an insurance, a common situation in my country.

It’s required if you have a mortgage.

Even if you don’t have a mortgage, your home is probably worth several times your annual salary. Most people can’t afford that loss if it burns down, gets hit by a tornado etc…

Also, consider that for a great many Americans, their house is the only significant asset they have.

A huge number of Americans have no retirement savings at all [1]. For some of these people who do own a house, selling it at retirement is the only way they can avoid poverty (or at least maintain their quality of life), especially with the possibility of a future government significantly cutting Social Security benefits.

Even those with retirement savings often treat their houses as an asset to be leveraged or sold at retirement to help fund the latter stages of their lives [2].

These are all good reasons to carry property insurance even if you don't have a mortgage on the property that requires it.

1. https://www.cbsnews.com/news/retirement-baby-boomers-with-no...

2. https://www.axios.com/2023/03/11/how-americans-are-using-the...

Thank you.

Probably an US thing, but, do you specifically have to declare you have a trampoline in order to get your home insured?

Undeclared trampolines? What kind of insurance is this?

I don't remember my house insurance (or medical, or any other kind really) being this detailed. I just picked rough estimates for the value of my structure and the items inside, and that was about it? There might have also been a waiver about not doing any hazardous activities like open fires or storing chemicals on the property.

It definitely wasn't this detailed.

Hello ! I writes software that deals with Home insurances. 1. Staggering number of people are getting seriously hurt on trampolines each year, so other people can sue you (=> insurance company) for injuries. It is on your property (((. 2. Same thing with pets and "vicious" dogs breeds on your property.

In my life, I've gotten three home insurance quotes, and every single one has asked about trampolines. And I do know at least two people who have been seriously injured on trampolines, so I can't blame them: they'd be liable for accidents.

I was asked about a trampoline with two major carriers. I believe they would have been satisfied to know it was netted, similarly to how they want pools fenced.

Homeowner insurance isn't just about the liability of the damage to your home from weather elements. A major part of it is liability you have to others who may have medical or other damage associated with your property. E.g. tripping over a paving stone, tree on your land falling on a neighbor's structures, dog attacks by your dog, etc.

Last insurance quote I got asked about trampolines, playground structures, dog breed, known risks like aluminum wiring or polybutylene piping, whether all doors had deadbolts, distance from nearest fire hydrant, and probably a dozen other things like this.

After reading that, my mind is generating weird scenarios in which undeclared trampolines are causing tragedies.

Trampolines can indeed cause accidents but is that big of a risk to have one? That feels so out of place it's beyond comical.

Trampolines break a lot of bones.

https://www.mayoclinic.org/medical-professionals/pediatrics/...

Generally yes, because the liability for injury would be on you, as the trampoline owner. Compare the probability of a guest breaking their leg when visiting your home vs if you have an unsafe trampoline. Insurers are prepared for the small risk in the former, but have not priced in the latter risk to a standard policy.

N=1 but there was a news story from a few years ago where a teen severed his spinal cord on one from landing on his head after a flip. I'm sure most of the claims are from simple orthopedic injuries with $5-$25k amounts but it only takes one paralysis claim to wipe out your risk model.

Yes. Growing up I saw my friend’s foot pointed the wrong direction after a “double bounce” caught his foot in the gap between the trampoline surface and the supports. We were careful kids.

Probably a case of trying to get something out of the information that happens to be available. Maybe they’ll also adjust your rates based when you get your roof redone or whether you park in your driveway?

It's probably about risk more than anything.

Trampoline installed well (i.e. staked down) with proper netting = who cares

Trampoline unsecured, no net = wind risk, personal injury risk, death risk

So wattle-it-be... switch insurers, live underground, or plant trees? Wattles are fast-growing and there's plenty of choice. http://worldwidewattle.com/

If insurance is individually priced to this degree, what's the point of insurance?

Why would insurance being individually priced negate its value? The benefit of insurance is the pooling of the risk. The more individually it is priced, the more efficiently it works. (Not that I'm a fan of insurers spying on their customers from the sky...)

Insurance incentives would drive them to want to predict as accurately as possible who is going to cost them money, and then deny them coverage. They make money from selling to people who are afraid of a calamity but likely won't experience one.

> Why would insurance being individually priced negate its value?

Perfectly accurate insurance pricing would be for each policy to cost exactly the amount of covered losses in the period covered plus the overhead of managing the insurance, which obviously would be pointless.

The insurance paradox. If you can price every risk precisely, meaning the variance on your prediction is zero, there's no point to insurance because it would be the same as a savings account.

There's no pooling of risk at all.

Because at the limit, the size of the pool is one...you.

If you can afford to rebuild your house after a fire, there will be no point (and there never was a point).

Insurance has always been a negative-EV trade for the average person, but there have been mispricings that make it positive-EV when you have more information than the insurance company. However, the inefficiency meant that you also had to pay for the uncertainty on their estimate of your risk.

With less uncertainty, the spread in the market should go down, and your premium should converge to something close to your actual risk plus the cost to assess your risk.

Insurance has always been a negative-EV trade for the average person

Negative EV in terms of dollars, but not necessarily utility. For most people, a 1% chance of losing their $500k home is worse than paying a $5100 premium.

Plus the salaries of the sales teams and the marketing budget and the executive bonuses and fancy offices… or were you rolling all that up into “cost to assess”?

If you could predict which house will burn down, there would be no point:

“All I want to know is where I’m going to die, so I’ll never go there.” - Charles Munger

But we don’t actually know the future that well, so even if we know that some houses are riskier than others, it’s still worth buying.

Higher liability means they need to extract more money from you. That's the point of insurance. See: wildfires in California and flooding in Florida causing insurers to pull out. Once the insurance companies lose money, the risk is too high...

To make you whole after a loss that you would be unable to pay for out of pocket. Fire, major water damage … that’s about it.

On a similar theme [near-future consequences of data-driven technocracy], read the hilarious _Qualityland_, by Marc-Uwe Kling.

that there is any effort at all to point out why this is okay is bewildering. it's antisocial behavior. there is a reason this is on hn, folks. and there is a reason why basic car insurance is not. not today, anyway. its because it is disruptive, obnoxious behavior that juts out and has jagged edges, and people dont stand for that. this isn't about my roof, or yours. people are quick to point out, "fwiw, they could cancel your insurance right now! they arent required to even give it to you, so yeah, they can do that" or, "they're perfectly within the law to do it, next". I paraphrase here, but regardless. I confidently say to that: Hah! then the law got it wrong, then. and the law needs to change. that is specifically the problem. they simply have too much power. and now they're rubbing our faces on it while a bunch of you rush to find why that's [legally] alright, while you only consider why it makes sense to you, not why it doesn't make sense to others. a critical oversight. they could have gone about this 100 different ways. fleet drones. really?

I predict that they are preparing substantial layoffs; thats the only thing that even begins to explain this situation. out with the old, in with the drones

Insurers telling you how to reduce the risk of accidents and property damage is a good thing.

The article literally opens with a story of an insurer dropping a homeowner for having a roof that's too old with no recourse, even when a third party expert said the roof is good for another decade.

> The red-flagged images are providing insurers with ammunition for nonrenewal notices nationwide.

I don't think your comment is wrong, but it's not representative of the problem the article is bringing up.

I think this is fine, BUT...

I think they should have to give people time to fix the problem before dropping them.

A neighbor literally just got a letter in the mail, "We think your trees are over your roof. Policy cancelled immediately." (The tree was over his daughter's playhouse in the back yard, the algorithm saw shingles obstructed by a tree branch and flagged it. They don't even bother with human review.)

There should be a warning period, "Hey we saw this, and if you don't fix it in 90 days we'll have to drop you." They certainly take money before doing an inspection... they're happy to have you start paying them right away as soon as you move in. Anyway there should be a time period for cut off of service.

Insurance companies are free to do inspections, but there's still the stress that getting a notice like that does to someone.

These days, who even reads letters from insurance companies in the mail?! I mean, I just chuck anything with a logo in the recycling.

And, from what I can tell, the insurance company dropped my neighbor when they sent the letter... so he didn't even know he wasn't insured until he got the letter.

Anyway... these companies aren't your friends. They're all out to screw you.

USAA screwed me over bad recently, to the tune of nearly $300k... they forced me to use their contractor (or we won't cover your temp housing), said not to worry and promised me a "5 year workmanship warranty" on the work done by their contractor... but when the contractor was utter shit, they put me through their mediation, where their mediator said, "Yeah all this work done by the contractor is junk, it all has to be re-done... if they don't fix it, we'll eat their lunch!" but ultimately they didn't enforcing any of that with the contractor and let the contractor off without any consequences -- even insisted I pay the contractor. "Oh you had no right to expect the work would be professionally done..." the contractor said in court. It was all total BS. And they said, "USAA may promise you one thing, but contract we have means we aren't liable for any damages to your house, 35-foot trees we killed, foundations we cracked, garage doors we backed into, things our endless stream of disorganized day-laborers stole, etc..." USAA's mediation process was really just a play to run out the statue of limitations on the contract too, I felt. =P

Live and learn... but insurance companies are heartless bastards. You can't trust them, and even the "good" ones will screw you if they can. Tell you one thing, and do another...

If you have a flood, call your lawyer first, the insurance company second, and the water mitigation folks third. Get it all in writing, take more photos than you ever thought necessary, and hope you have an adjuster who isn't having a crappy day that day.

Disheartening to hear USAA let you down. I've been with them for years and haven't really shopped around because generally their customer service is pretty great. Not worth it to me to save a few bucks and then deal with really crappy customer service when the shit hits the fan.

> “If your roof is 20 years old and one hailstorm is going to take it off, you should pay more than somebody with a brand new roof,”

If you've been paying for insurance for 20 years with one company, then I'd say that is certainly a dick move to drop you right before it might pay out. What even is the point then?

It is NOT the insurance company's job to replace a worn-out roof. That is YOUR responsibility! If a roof on your home is not up to the proven (albeit occasional) stresses of your local environment (including snowfall, winds, volcanic ash, etc.), whether due to quality, design, or wear, I see no reason why the insurer should not modify its indemnity. I will grant you that a decent insurer would allow you to petition for a review based on any verifiable additional information that you, as owner and insured, might be able to present.

The (lesser) dick move is also pitting customers against each other.

Divide et impera. Works with insurance, social security, and third world countries.

Do car insurances pay the full price for crashed old cars? If roofs are designed with a similarly limited expected useful life lower payout would make sense like for cars?

Related, my vehicle insurer keeps jacking up the rates. I've never been in an accident or had a ticket, and I drive 2000 miles per year. But every year up up up. Then they offer I install a tracking device on my car to get my rates back down to a reasonable amount. There seems to be a pattern of insurers wanting to know everything about everyone, and using irrationally higher rates to coerce consent. And I have to pay it or consent to tracking because insurance is mandated by law.

Car manufacturers are building telemetry into the vehicle, which they can sell directly to insurance companies. If you buy such a car, your insurer doesn't need you to install anything.

https://www.nytimes.com/2024/03/11/technology/carmakers-driv...

My opinion is that the opt-in hardware might have afforded you some discount, maybe. I doubt the same is true for the manufacturer-insurer relationship. I think that pattern is probably more likely to establish a higher baseline for all drivers, and the presence of data can only ever (1) maintain the baseline or (2) harm you.

that’s because the insurance model is not based on individual performance but based on a collection of data points.

Insurance will jack up the renewal rates for everyone because there are increased number of accidents in your zip code or area. Cars are more expensive now. Often adjusters just declare vehicles no longer worth the repair. Some vehicles if they get dented will result in a shit ton of work to get it repaired (ie, Rivian truck).

You are paying for the insurance companies increased risk because the people around you can’t drive worth shit.

Got to love car centric transportation …

> You are paying for the insurance companies increased risk because the people around you can’t drive worth shit.

Insurance companies are supposed to be creating risk pools. If everyone in my zip code drives like shit the insurance company should be splitting them up into pools with better drivers from other areas. There's no reason at all to pool everyone geographically. If the insurance company can't manage risk pools they're fucking up.

My insurer jacks up the rate even with the tracking device. The rate more than doubled in the last 3 years.

One of us needs to win a lottery; and force (er, strongly incentivize) Congress to pass a law banning the lowering of insurance prices based on tracking devices.

Maybe the rise in the prices of new cars, used parts, and labor has an impact.

> There seems to be a pattern of insurers wanting to know everything about everyone

I see an exciting new revenue stream in their future.

repair cost goes up, up, up on average -> insurance goes up, up, up.

That may only be part of it, but it's definitely part of it.

You’re free to change insurance companies, aren’t you?

They're ALL raising rates. You might be able to change to a cheaper one this year, but next year your cheaper company will have implemented a 20%+ increase.

You're also free to find companies whose contracts don't have binding arbitration clauses. Good luck.

Insurance is a borderline scam. You have to have it by law or in case the worst happens. When the worst does happen get ready for a fight as they will do everything they can legally do to wriggle out.

You don't have to have home insurance by law, at least not in the US

If you don't own your house outright, the bank that owns part of it may require insurance as a prerequisite for loaning you money.

Without insurance, we’d be living in much different circumstances. Just consider parts of the world where insurance is just not available to much of the population.

If it’s a scam then don’t buy it. Pay cash for everything and put up a bond with your state, you don’t even need car insurance at that point.

You don't have to have home insurance if you own the home.

Insurance bothers me for a few reasons:

1. What pisses me off more than anything else, it enables fraud that otherwise wouldn't exist. People manufacturing calamities and then claiming insurance allows dishonest people to get ahead in life over people who are honest and concerned enough about the future to buy insurance. Additionally, insurance fraud is net bad relative to other types of fraud because it encourages criminals to manufacture damage that wouldn't otherwise happen.

2. There is an obvious incentive for them to chase an endgame of knowing exactly whether you will cost them money or make them money. When they attain this, insurance simply becomes a fortune teller and an instruction manual for Living Without Calamity. If you're denied coverage, you're going to experience something calamitous. If you're accepted, you have the ability to be fine and don't need insurance, unless you aren't sure how to Live Without Calamity. When you are accepted, you're only covered if you surrender your agency and follow their instructions for Living Without Calamity. Basic things like travelers insurance have clauses that void your policy if you scuba dive past 30 feet on your trip.

3. Insurance policies can create toxic incentives for people that hurt society. I filed a claim with Generali travel insurance because my host tested positive for COVID with a take home test, and I canceled my trip. Their web portal indicated that my claim had been received and was awaiting processing. I called incessantly to confirm my claim was good, and was not able to get an answer after several calls that routed through incompetent-by-design help desk employees and into a voicemailbox of a claims processor. Weeks go by and I receive a voicemail from the person I had been trying to contact telling me that I needed a doctor's note confirming that the person had COVID, and a take home test would not suffice. So, a company allegedly tasked with helping the public live safely wanted me to, at the time, ask my COVID infected host to waltz in to the doctor's office and spread around a pathogen that could kill patients. Nice. I guess they weren't medical insurance so they didn't care. And of course no doctor would retroactively go back in time and confirm that a person was positive for a sickness after they had already recovered.

Regarding your situation in point #3, if your claim was of significant monetary value (I'm guessing $>2k) I think at that point I would have cited them some numbers from journal studies on take home tests showing sensitivity of such home tests as at least (78.9)[1] percent of a professionally administered PCR test and that by their actuary logic you should then at least receive at least 78.9% in return compensation of your total claim based on this data and if they otherwise refused a payout your follow up would be with a claims lawyer.

I have no idea how that would play out but it seems like an interesting strategy to take.

[1] https://pubmed.ncbi.nlm.nih.gov/34448871/

What did policy actually state around medical reasons for trip cancellation? I'm not aware of any insurers that would accept a home COVID-19 test to justify a claim since it isn't reliably tied to any particular patient.

> So, a company allegedly tasked with helping the public live safely wanted me to, at the time, ask my COVID infected host to waltz in to the doctor's office and spread around a pathogen that could kill patients. Nice.

No. That is done over the phone or video chat. Not required to physically attend a doctors appointment in order to obtain a doctors note for COVID infection. It's called telemedicine or virtual consultation.

I'm going to assume that nobody's insurance premiums or deductibles are going down from this data. No analysis is making the insurer say "Oh, that roof is in much better condition despite its age."

Insurance feels like the biggest scam in the history of the world. You are legally obligated to pay us for nothing, most of the time.

> No analysis is making the insurer say "Oh, that roof is in much better condition despite its age."

That’s exactly what they do. There are people getting paid millions of dollars to create software that does this.

Do you know how much money an insurance company can print if they can undercut the competition by selling a bunch of policies to people who won’t file a claim?

People pick insurance based on price, and if someone is selling you a cheaper policy because they know your roof is better, you’re going to buy it from them.

They win because you’ll pay a premium without filing a claim, and you win because you can have a cheaper policy. That’s how it works in the real world.

This doesn't make sense. If an insurance company wanted to charge higher premiums, they would just do so. They wouldn't need to spy on customers.

The point of them trying to quantify risk as accurately as possible is to be able to extract profit while also offering competitive rates.

It's the same as with any other company. They try and operate as efficiently as possible (ie. reduce costs) to try and make more profit, while competing on price.

> I'm going to assume that nobody's insurance premiums or deductibles are going down

That's exactly backwards. If you have better information than a competitor, you have an effective strategy to steal their lower-risk customers and still make a ton of money.

This absolutely will happen. And the rates for the higher-risk customers they are left with will absolutely go up.

You're not legally obligated to pay for homeowners insurance.

The insurance scam is, classically, someone getting a policy on an asset they know is worthless, going to catch fire, suddenly die, etc. -- and you do pay higher rates as a result.

Insurance carriers have an incentive to compete on price like any other business. There are plenty of options. The margins are generally pretty small, and there is a lot of regulation around what portion of payments must be used for claims.

There's a few obvious exceptions, but plenty of insurance isn't required.

5 years ago, a family friend got an angry letter from the city because he had cleared slightly too much lakefront weeds (and by slightly - I mean very lightly, enough to anger the algorithm lightly). How did they know? Drone. And this was suburban Minnesota.

Not even insurance - this was the city of Newport on a power rampage. Turns out there’s also no shortage of general corruption in the police department…

https://bringmethenews.com/minnesota-news/footage-shows-newp...

What does drones detecting weeds have to do with "general corruption"?

If anything, overzealous adherence to the letter of the law, while annoying, seems the exact opposite of "corruption."

rules are rules. you complaining about this is like football fans complaining about the tight offside calls.

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