How Insurers Are Responding to The Rise of GenAI-Fueled Auto Insurance Fraud

www.forbes.com, Amir Hever, January 6, 2026 

Insurers in the U.S. lose roughly $308 billion to fraud per year—nearly 25% of the industry’s total value. Within the property and casualty and auto insurance sectors alone, annual fraud losses can reach as much as $45 billion.

The result is a roughly $700 increase in premiums for each American family.

Vehicle claims have long been a target for fraud tactics like staged accidents and inflated repair bills. But the emergence of generative AI has dramatically expanded the scale and sophistication of this threat. With minimal skill and effort, fraudsters can now easily conjure up convincing fake images, videos, documents and other evidence of damage. This lowered barrier to entry has resulted in a surge of fake AI-assisted claims: One major U.K. insurer, for example, noted a 300% increase in doctored claims photos in just one year.

The industry’s ongoing push toward automated, "touchless" claims processing further amplifies the risk, with 70% of standard insurance claims set to be handled with little to no human intervention by 2025. It’s an efficiency gain that comes with the risk that AI-manipulated claims will slip past automated assessments and automatic anti-fraud controls.

If left unchecked, the issue of AI-manipulated claims could increase fraud losses exponentially.

Fake Images, Real Threats Continue article