BILL NUMBER: S9156
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the insurance law, in relation to the use of aerial
images for the purposes of homeowners' insurance
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill would restrict and regulate the manner in which insurance
providers can use aerial imaging in a decision to cause a cancellation
or nonrenewal of coverage, a reduction in coverage, or an increase in
premiums of more than ten percent.
 
SUMMARY OF PROVISIONS:
Section one amends the insurance law by adding a new section 3463
Section two provides for the effective date
 
JUSTIFICATION:
For decades, property insurers have relied on a variety of tools to
assess risk and determine appropriate coverage for homeowners. In recent
years, one of the most significant technological changes in underwriting
has been the growing use of aerial imagery.
While aerial imagery can be a useful and efficient underwriting tool,
its increased use has also raised concerns among homeowners and policy-
makers. Insurers have, in some cases, made adverse underwriting deci-
sions based solely on images that are outdated, low-resolution, or taken
from angles that do not accurately reflect the condition of a property.
These decisions may include nonrenewal, cancellation, reductions in
coverage, or significant premium increases, often without clear notice
or an opportunity for the homeowner to correct any issues.
Recognizing these concerns, a growing number of states have begun to
regulate the use of aerial imagery in insurance underwriting. Several
states now require insurers to rely only on recent imagery when making
decisions about coverage. For example, Rhode Island requires imagery to
be no more than fifteen months old, while Louisiana requires imagery
less than twenty-four months old.
Across these state efforts, several common themes have emerged. Legis-
latures have generally recognized the value of aerial imagery as a
legitimate underwriting tool, while also placing reasonable limits on
its use. Many proposals require insurers to conduct a physical
inspection when aerial imagery does not conclusively demonstrate materi-
al damage. Others require insurers to provide clear underwriting guide-
lines, give homeowners notice of any identified issues, and allow a
reasonable opportunity to remedy those issues. Most also include a
right for policyholders to challenge or appeal adverse decisions based
on aerial imagery.
This legislation builds on those emerging best practices and applies
them to New York. It establishes clear rules governing when and how
insurers may rely on aerial imagery to make adverse underwriting deci-
sions. Under the bill, insurers must notify policyholders if aerial
images may be taken or used during the policy period and must provide
copies of those images upon request.
If an insurer bases an adverse decision in whole or in part on an aerial
image, the bill requires the insurer to include date-stamped images
showing the specific conditions that allegedly fail to meet underwriting
standards. It also requires the insurer to provide a clear process for
appeal, including the option of an in-person inspection, and a process
for remediation, giving the homeowner at least sixty days to address any
identified issues. Importantly, the legislation ensures that decisions
are based on current information by prohibiting insurers from relying on
aerial images that are more than one hundred eighty days old when making
an adverse decision.
This bill does not prohibit the use of aerial imagery. Instead, it
establishes reasonable consumer protections to ensure that such technol-
ogy is used fairly, transparently, and accurately. By requiring notice,
access to images, opportunities for appeal and remediation, and limits
on the age of imagery used, the legislation strikes a balanced approach
that protects both insurers' ability to assess risk and homeowners'
rights to fair treatment.
As insurers continue to adopt new technologies in underwriting, it is
essential that state law keeps pace. This legislation provides clear,
common-sense safeguards to ensure that homeowners are not unfairly
penalized based on outdated or misleading images, while still allowing
insurers to use modern tools to evaluate risk. It represents a measured
and necessary step to protect consumers and promote transparency in the
insurance market.
 
PRIOR LEGISLATIVE HISTORY:
None
 
FISCAL IMPLICATIONS:
TBD
 
EFFECTIVE DATE:
This Act shall take effect immediately