Airborne cameras are taking pictures of individual houses across the U.S.

Insurance companies use the photos to inspect buildings after extreme weather, from hurricanes to hailstorms. But they also use them to determine which homes are too risky to insure.

A bill in California—a state plagued by earthquakes and wildfires—would require insurers to notify policyholders if aerial photos could be taken during the policy period, and would direct insurers to spell out how consumers can get a copy of the pictures, which could be used to fight insurance cuts or changes.

“Extreme weather events have resulted in many Californians being blindsided by insurance policy nonrenewals,” said Assemblymember Lisa Calderon, who proposed the bill. “Use of aerial images, often inaccurate or misleading, to justify these nonrenewals has compounded the problem.” The proposed legislation is likely to become law later this year.

U.S. insurance companies have used aerial images to justify scuttling policies for properties that they deem too risky, which has alarmed some consumers who didn’t know their homes were being photographed. Insurers typically rely on airplanes and drones to snap photos of buildings, part of how they assess underwriting and pricing.

Near Space Labs, a New York-based startup, provides aerial imaging from flying robots, each about the size of a suitcase, carried into the stratosphere by balloons.

“In three or four hours, we could be covering all of Dallas, Texas,” said Asa Block, chief operating officer at Near Space Labs.

Insurers have said that customers agree to home inspections as part of their policy, and that it is less intrusive to photograph them from the sky than to conduct home visits. The industry also says aerial photos help it respond faster to disasters.

As some insurers withdraw from swaths of the country, including California, because of costly natural disasters, the bill could give consumers in the Golden State more insight into how insurers are judging their homes.

But the California bill doesn’t go far enough, according to United Policyholders, a San Francisco-based nonprofit that advocates for homeowners. The group is working on a national model for aerial imaging law, looking to require insurers to provide consumers with copies of date-stamped photos of their homes—rather than putting the onus on the customer to ask.

The California bill doesn’t give consumers any substantial help or protection, said Amy Bach, executive director at United Policyholders.

The insurance industry is in favor of creating an easier process for customers to dispute the accuracy of an image or prove that an issue on their property has been fixed, said Denni Ritter, vice president of the western region at the American Property Casualty Insurance Association

A customer could say “this image is from eight months ago, I replaced [the roof] four months ago, may I show you proof of that,” she said.

“I think we’re in a situation in this state where we need as many insurers as possible to be writing insurance,” she said. “And the easiest way for insurers to assess a property—and the most cost effective—is aerial imagery.”

Ritter said flying drones over areas that were inundated by wildfires earlier this year helped companies determine what was happening to properties when it wasn’t safe to examine the damage on the ground.

The insurance industry pulling out of risky areas offers warnings for those looking to buy a home, said Parinitha Sastry, an assistant professor of finance at Columbia Business School, who has studied how climate is reshaping the insurance industry.

“It’s an important signal,” Sastry said. “You don’t want people to move to high risk areas and not realize they’re high risk areas.”

U.S. counties with high fire risk saw 63,365 more people move in than out in 2023, according to real-estate company Redfin.

Real-estate uncertainties are ballooning because of increasingly destructive weather. Extreme heat can lead to a range of insurance claims because it increases the risk of electrical outages and wildfires, and can also damage and disrupt transportation, water and energy infrastructure, said insurance company Swiss Re in a recent report.

The demand for more data to determine insurance policies, such as aerial photos, is mounting. Near Space Labs hit a milestone in April when it secured $20 million in funding from investors including the United Services Automobile Association, known as USAA, which provides insurance to military families and veterans.

The New York startup has plans to launch infrared sensors attached to its robots that will be able to penetrate smoke or water, which would be especially useful during wildfires.

A building’s susceptibility to fire can be affected by seemingly minute details, from how close certain trees are to a home, to how moist the soil is around the property.

More granular data could also give insurers a reason to justify not pulling out of certain regions completely, said Block at Near Space Labs.

“This house might be risky, but the house next door may actually be fine,” he said.