DE Insurance Commissioner Issues Bulletin Regarding Insurer’s Drone Usage
March 24, 2025/
Delaware’s Insurance Commissioner has issued a bulletin regarding insurer’s drone usage. Commissioner Trinidad Navarro says that while aerial photography use has increased, insurers must balance these innovations with a commitment to fair consumer treatment, regulatory compliance, ethical standards and aerial imagery must be utilized in a transparent manner. This bulletin provides guidance as to how carriers are to safeguard consumers, prevent unfair business practices and ensure underwriting decisions are made with appropriate evidence and not solely based on the cosmetic factors of a property.
Additional information from the Insurance Commissioner:
Aerial imagery, while useful, has inherent limitations such as the potential for image distortion and an inability to identify fine details, or light and weather interference.
Unmanned aircraft systems such as drones have been increasingly used by property insurers, including for reviews of policyholders’ roof conditions. Roof discoloration and streaking has been cited by carriers as a reason for policy nonrenewal or cancellation, but the guidance makes clear that cosmetic issues are not a valid ground for cancellation. Insurers must provide clear evidence of significant degradation or damage that increases the risk of loss substantially.
Bulletin No. 150 specifies that carriers must continue to follow the Insurance Code relating to policy activities, and that policyholders must be given proper notice and a clear explanation of the specific reasoning for any policy cancellation or nonrenewal, including when aerial imagery contributes to the determination. Nonspecific reasons, such as “claims experience,” “underwriting judgement,” or “increase in hazard” are unacceptable as they do not provide the Delawarean sufficient notice to address the underlying issue and make any necessary repairs.