Massachusetts Bulletin on Aerial Imaging for Underwriting

MAURA T. HEALEY MICHA EL T. CA LJOUW GOVERNOR COMMISSIONER OF INSURANC E KIM BERLEY DRISCO LL LIEUTENANT GOVERNOR COMMONWE ALTH OF MASSA CHUSETTS Office of Consumer Affairs and Business Regulation DIVISION OF INSU RANCE One Federal Stre et, Suite 700 • B oston, MA 0211 0 (617) 521- 7794 • T oll -free (877) 563-4467 www.mass.gov/d oi BULLETIN 20 25- 02 To: All Property and Casualty Insurers Writing Property and Casualty Coverage in Massachusetts From: Michael T. Caljouw, Commissioner of Insurance Date: April 30, 2025 Re: Underwriting Actions Based on the Use of Aerial I maging ______________________________________________________________________________ The Massachusetts Division of Insurance (“Division”) has heard concerns about insurers non-renewing, not issuing, or cancelling policies based upon aerial imagery tec hnology in lieu of a physical property inspection. The Division offers the following guidance to provide clarification to insurance companies regarding the appropriate application of aerial imagery as an underwriting tool. Use of Aerial Imagery I nsurers may employ aerial imagery tec hnology to evaluate a property’s condition and have the right to refuse coverage if clear evidence of property de gradation or damage exists. However, insurers using aerial imagery and aerial images are expected to ensure the clarity and accuracy of these images. Further, cosmetic da mage that does not fundamentally reflect the structural quality of a property or its propensity for loss, such as roof discoloration or streaking, should not be the sole basis for a non-renewal, cancellation, or declination to write a policy. Physical Inspection of Property Insurers are expected to use due diligence when using aerial imagery. If aerial imagery does not unequivocally provide clear evidence of property degradation or damage warranting a refusal to write or renew, the Division expects that insurers conduct thorough additional underwriting review, which may include a follow-up physical inspection to validate the underwriting decisions derived fr om aerial image data. Additionally, should any dispute about the underw riting decision arise due to the use of aerial images, the Division expects insurers to timely review any relevant material pr ovided by an applicant or insured that contests the insurer’s findings regarding the p oor condition of the property, and adjust the underwriting decisions accordingly.

2 Non-Renewals and Cancellations Insurers are reminded that they must comply with all applica ble Massachusetts laws, including the statutorily required notice requirements set forth in M.G.L. c. 175, § 193P and M.G.L. c. 175, § 99 regarding the cancellation and non-renewing of policies. Insurers are expected to provide the insured a nd/or their agent with specific reasons for the nonrenewal so that insureds may attempt or arrange for nece ssary remedial action. The Division further encourages insurers to provide as much advance notice as possible, considering challenges associated with completing replacement or repairs within that period. For information or questions about this bulletin, please contact the Division of Insurance at masspc@mass.gov.