In Texas, insurers are watching your home from above. It could cost you coverage.

Tracy Gartenmann had no idea the company that insured her home against wildfires, hailstorms and high winds was also spying on her.

Until she got an email.

In January, a representative for Travelers Insurance emailed Gartenmann to say the company would not renew the policy she'd had on her home in Austin for more than a decade.

Trees had edged too close to her roof, a company representative said, endangering the home. How did they know? Attached to the email were two photos from above Gartenmann's house. The representative said they had gotten the sky-high images from a third-party company.

"I thought it was a scam," said Gartenmann. Once she realized the email was real, her reaction changed: "It felt like an infringement on my rights."

KUT News spoke with homeowners, industry experts and insurance watchdogs, and reviewed hundreds of pages of complaints and state filings. Documents obtained through public records requests confirm that insurers in Texas are using aerial photos taken by satellites and aircraft to determine if they want to keep insuring homes.

At least one company uses computer models to inspect these photos and flag moldy roofs, askew tree branches and missing shingles. Insurers then notify homeowners their policies may not be renewed.

While it's unclear how many homes are under surveillance, the number could be massive — and growing. One aerial imaging technology company common among insurers says it has eyes on 99.6% of the country's population.

Faced with more extreme weather and costlier damage to homes, insurers are increasingly relying on new technologies like aerial images to evaluate policies — and in some cases, to forgo risk. Between 2020 and 2023, the rate at which insurers in Texas chose to not renew home insurance policies almost doubled.

Organizations representing insurers say aerial photos are more efficient than sending workers to inspect. But groups representing homeowners say the practice can lead to inaccurate conclusions that are hard to contest. One company widely used by insurers to assess aerial photos says they're less accurate than human inspections.

"We're really losing the human touch when it comes to the purchasing and servicing and adjusting of insurance policies," said Ware Wendell, executive director of Texas Watch, a consumer advocacy group. "And I think that's a bad thing for policyholders."

Eyes in the sky

Travelers gave Gartenmann two months to trim her trees or risk losing coverage.

Living without homeowner's insurance is a big financial gamble. Not only does an owner risk being unable to rebuild should they lose their home in a storm, but mortgage lenders penalize homeowners who go uninsured.

Gartenmann paid a landscaping company $3,000 to prune her trees. She emailed photos of the cut-back branches to Travelers and waited. She said the company agreed to renew her insurance policy just days before it was set to expire.

Others are not so successful. Homeowners have reported nonrenewals because of flyby shots in Florida, North Carolina and Pennsylvania. Last year, The Wall Street Journal reported on a case in California.

In Texas, homeowners in San Antonio, Houston and Austin have had insurers threaten to not renew their policies because of aerial photos, according to records obtained from the Texas Department of Insurance. Industry experts say homeowners agree to have their homes inspected when they sign a policy.

"They have the right to come out and look at your house. They, I guess, have a right to look at it on a satellite," said David Bolduc, who heads the Texas Office of Public Insurance Counsel, which represents insurance customers.

Regardless, homeowners have filed at least a dozen complaints with the state since 2023.

KUT News reviewed six detailed case files of these complaints. Some homeowners said they were shocked to learn insurers were monitoring their homes from above — and in a couple of cases refusing to renew their policies based on poor, outdated or inaccurate images.

Some companies rebuffed requests to show homeowners aerial photos of their own homes.

In 2023, State Farm told a homeowner outside Galveston it would not renew their policy unless they replaced the roof. The homeowner hired a roofing company, only to be told all the roof needed was a thorough scrubbing.

The homeowner wanted to know what State Farm was seeing. "I have asked on numerous occasions for the report & drone pictures from underwriting to support their so called decision," the homeowner said in a complaint.

In response, State Farm cited its policy: The company has the right to survey a home at any time and is not required to provide inspection reports.

Once the state got involved, State Farm agreed to renew.

Third-party companies and AI

An aerial photo of a house in Houston looks like this: A mess of bulbous green (trees) surrounds a brown rectangle (house). The photo is grainy. It's hard to make out much beyond a white thumbnail in the driveway (car) and a translucent matchbox in the backyard (pool).

Insurers covet these images. Take State Farm, which dominates the home insurance market in Texas. The company has policies in every town and eyes on almost every home.

In state filings, State Farm says it uses a third-party company, CAPE Analytics, to obtain and evaluate aerial photos of homes. Its technology is used by insurers that make up at least 20% of the home insurance market, according to state data.

CAPE says it has access to aerial photos covering nearly all of the U.S. According to its website, the company uses artificial intelligence to analyze roofs in these photos. Each roof is rated depending on what the company's model perceives as damage.

And with the proverbial click of a button, companies can decide if they want to renew a homeowner's policy.

KUT News reached out to CAPE Analytics for comment but did not hear back.

Insurance companies in Texas are required to upload documents to a central database detailing how they evaluate homes and set prices, including information about third-party companies they use.

KUT News used this database to access a CAPE manual an insurer filed in 2024. The manual appears to be from an older version of CAPE's technology, but it is one that insurers are still using.

In the document, the company says its roof-rating technology is a "low-cost" alternative to in-person inspections. Those in the insurance industry argue the use of aerial images helps lower insurers' costs, which in turn restrains rate hikes for customers.

"Rather than having somebody walk through neighborhoods or go from house to house, [insurers] can cover a large amount of area," said Richard Johnson, director of communications for the Insurance Council of Texas, a trade association for insurers.

But CAPE's manual also says that aerial photos tend to be less accurate than human inspections.

"Roof condition[s] derived from drive-by or on-site inspections of residential single family dwelling structures can typically return more detailed analysis of minor defects of the roof," the manual reads. "[O]bservations from such an inspection are guaranteed to reflect the most current condition of the roof."

KUT News sent questions to five insurers that disclosed to the state or customers they use aerial images in renewals. Nationwide and Travelers were the only companies to respond with general statements, both stating they use aerial images to help write policies.

"As an insurance and financial services company, we continually assess and balance our portfolio based on the level of risk in our books of business," said Kevin Kemper, a spokesperson for Nationwide. "We utilize technology and third-party services to assist in the underwriting of those risks, including aerial imagery."

According to photos included in state filings, other insurers use the company Nearmap which, according to its website, also offers AI analysis of aerial home photos.

Texas does not prohibit insurance companies from using artificial intelligence. But people like Douglas Heller, director of insurance at the Consumer Federation of America, hope lawmakers might start regulating it. "The companies have just been Wild West-ing this one," he said.

But Texas officials seem interested in legislating AI in insurance. Lawmakers are currently considering a bill to require health insurance companies to publicly disclose, on their website and to individual customers, if they use AI-based algorithms to evaluate claims.

The bill, as written, would not apply to companies providing other kinds of insurance.

A case of the wrong roof

Nationwide is one insurer that says it uses CAPE Analytics' images and software to evaluate homes.

In 2023, Nationwide told a homeowner in Austin it would not renew their policy because an aerial photo showed their roof was in "poor condition." The company said the roof was discolored, possibly indicating algae on the shingles.

All of this was surprising to the homeowner. Because the roof was a year old.

KUT News was not able to speak to the homeowner directly. The Texas Department of Insurance, which collects these complaints, does not release names and addresses of homeowners.

In their complaint filed with the state, the homeowner said they realized they lost insurance when their mortgage company sent them a bill.

If insurance lapses and an owner still owes money on their home, a mortgage lender can take out insurance on the owner's behalf. These policies tend to be more expensive and offer less coverage than a typical policy.

The homeowner who complained owed their mortgage lender $156 for the month they went without insurance. In the meantime, they found a different insurer. And asked the state to investigate.

Two months later and in response to the state's questions, Nationwide said it had made a mistake.

"After further review, it was determined that our underwriting associate had initially reviewed the wrong aerial report," a company employee wrote. "The correct aerial report would not have warranted any action to be taken regarding the roof."

It's not clear whether Nationwide or its associates looked at an outdated photo or a photo of an entirely different home.

Nationwide said it does not comment on individual cases.

Privacy concerns

In Texas, insurers have the explicit right to surveil your home from above — even more than they're currently doing.

In 2013, state legislators passed a law to protect residents from unmanned aircraft, including drones, flying over their homes. The law limits who can snap sky-high pictures of someone's home to people working for law enforcement, oil and gas companies and organizations using satellites for mapping — among other exceptions.

"Why should the government or anyone else be able to watch my every move?" then-state Rep. Lance Gooden, a Republican from east of Dallas who authored the bill, told the Texas Tribune.

But in writing the bill, lawmakers also decided drones could be flown over private property within 25 miles of the U.S.-Mexico border as a matter of border security. That did not sit well with lawmakers representing those areas. They made their ire clear two sessions later.

"How would you like people to be able to fly a drone over your house?" state Sen. Judith Zaffirini, a Democrat from Laredo, said at a hearing in 2017. Zaffirini and a group of fellow borderland legislators proposed a simple edit: Remove the exception for people living near the border.

Lawmakers made one more tweak to the bill before it went into effect. Insurers and their affiliates could also fly drones over private property for the purpose of writing policies, including renewals.

It's not clear from public hearings why or exactly when this change was made.

KUT News sent a list of questions to Zaffirini and Rep. Armando Martinez, a Democrat from Weslaco, who worked on the bill in the House. Both offices said they were not available for comment.

While Texas law allows it, it's unclear how common it is for insurers to fly their own drones over homes. Some insurers say they use drones to assess storm damage but have not publicized whether they use them in everyday inspections.

KUT News asked insurers if they use their own drones. Only Travelers responded, saying it does not use drones when writing policies. In response to a state complaint, State Farm also said it does not use drones to survey properties.

And they may not need to. Companies like CAPE Analytics and Nearmap seem to be offering the kind of eyes insurers increasingly want: quick, cheap and everywhere.

"Not every company's using [this kind of technology]," said Mark Friedlander, director of media relations for the nonprofit Insurance Information Institute.

"But they will eventually."