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Your insurance company is probably using artificial intelligence to process your claims and set your rates. But a new industry survey suggests many insurers are rushing into AI without proper safeguards—and that could affect you as a policyholder.
According to Grant Thornton’s 2026 AI Impact Survey, nearly half of insurance executives admit that poor governance has caused their AI projects to fail or underperform. Even more concerning? Only 24% feel confident they could pass an independent AI review within three months.
How Insurers Are Using AI Right Now
The technology is spreading fast across the insurance industry. More than 40% of companies are actively using AI in core business areas, from processing claims to determining your premium rates. Some are seeing real benefits—52% report AI has boosted revenue growth, while 62% say it’s improved their decision-making.
But here’s the catch: while 61% of insurance companies have AI governance policies on paper, many can’t actually prove these controls work in practice. That’s like having a speed limit sign without any way to enforce it.
The typical driver processes around 3-4 insurance interactions per year through digital channels, according to industry data. Each of these touchpoints—from getting a quote to filing a claim—likely involves AI technology that processes your personal information and makes decisions about your coverage.
Make Sure You’re Not Overpaying
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What This Means for Your Coverage and Claims
When insurers deploy AI without proper oversight, several things can go wrong for policyholders. Your claim might get incorrectly denied by an algorithm, or you could face unexpected rate increases based on flawed data analysis.
Poor data quality is a major issue. If your insurer’s AI system is working with incomplete or outdated information—say, an old address or incorrect driving record—it could affect your rates or claim decisions. Legacy computer systems at many insurers make this problem worse by creating data silos that don’t talk to each other.
The AM Best research firm found that data readiness, security concerns, and integration problems are the biggest obstacles insurers face when rolling out AI tools. That’s not exactly reassuring when these systems are handling your sensitive financial and personal information.
The Broader Industry Shift
This isn’t just a temporary trend. Nearly 60% of insurance executives expect AI to fundamentally transform their business models within the next three years. We’re likely heading toward a future where AI handles most routine insurance tasks—from initial quotes to simple claim approvals.
Some states are already taking notice. California and New York have started examining how insurers use AI in pricing and claims decisions, particularly around potential bias in coverage decisions.
What Drivers Should Do Now
First, review your insurance statements and claim histories more carefully. Look for unexplained rate changes or claim decisions that don’t make sense based on your driving record.
When shopping for coverage, ask potential insurers direct questions about their AI use. How do they ensure accuracy? What appeals process exists if an AI system makes an error? Companies with robust governance should be able to give you clear answers.
Consider working with insurers that offer transparent telematics programs if you’re comfortable with usage-based monitoring. These programs often provide more insight into how your rates are calculated.
Keep detailed records of your interactions with your insurance company, especially around claims. If an AI system makes a questionable decision, having documentation helps when you need to appeal.
Finally, stay informed about your state’s insurance regulations. Some states are developing new rules specifically around AI use in insurance, which could provide additional consumer protections.
The insurance industry’s AI adoption isn’t inherently bad for drivers, but the current governance gaps mean you need to stay more vigilant about your coverage decisions.
