Why relying on AI-generated information can create risk – and why verification still matters in insurance
February 11, 2026Artificial intelligence (AI) is having an increasing impact on many aspects of everyday life, including the information it generates.
However, it also needs to be treated with appropriate care. That is especially so in the case of insurance, where the potential for inaccuracy and a failure of regulatory compliance risk undermining the very protections that insurance provides.
AI has become second nature for many
An article posted by solicitors Palmerslaw recently conceded the perks and benefits of AI in helping with everyday paperwork. But it also highlighted that by its very nature, AI-generated information lacks the critical context that makes sense of most of our issues and problems.
While AI may offer general guidance to the nearly one in five people* who currently use it to help resolve personal issues, the article concludes that the absence of lived, human context means that the technology may not always be suitable for providing the nuanced advice often required in legal matters – and, by implication, insurance issues.
The sometimes misguided and incomplete information to which AI can be prone may make it an unreliable tool – for example:
- for insurance where policy features, benefits, terms, and conditions may vary among policies and providers;
- where insurance claims must follow strict procedures and comply with the relevant insurer’s particular policies and guidelines.
Inaccuracies and falsehoods matter
A report by BBC News revealed how criminals are never far behind any apparent advance in technology. AI has been seized upon by criminals to mislead, swindle, and steal money from others through fake businesses.
The story highlights two further risks associated with an over-reliance on AI for property and landlord insurance matters – accuracy and compliance.
All that seems true may not be
AI generates information that appears entirely plausible, reflecting a confidence that it is the truth. But that is not always the case, and even apparently minor inaccuracies can seriously undermine the validity of your insurance – if it mistakenly quotes a policy condition or misstates UK legislation, the consequences can be significant and may result in a claim being rejected.
Regulatory compliance
The UK insurance industry is closely regulated and the Financial Conduct Authority (FCA), has strict guidelines designed to ensure that all insurance business is conducted clearly, fairly, and in a way that is not misleading.
An over-reliance on AI-generated information, with results that have not been independently verified, can lead to an inadequate disclosure of material facts or a misrepresentation of insured events – potentially leading to invalid insurance and the denial of any subsequent claims.
The use of AI
AI-generated information is here to stay and has undeniable benefits in the provision of general guidance.
However, with AI providing very broad guidance on insurance matters (and in some cases providing information not even relevant to the country where you live), it remains important to verify that information by checking your original policy documents.
If you have questions about the cover provided by your specific insurance policy, it can be helpful to speak directly with your insurance provider or broker rather than relying solely on AI-generated information.
Your insurance broker can help clarify how policy terms apply in practice, explain claims processes, and highlight any regulatory or disclosure considerations relevant to your individual circumstances.