5 Mistakes the AI Robot Is Making With Your Insurance Right Now

Written by Mark Rodgers, President and Founder, Trailstone Insurance Group

Somewhere right now, a computer is looking at a photo of your roof and deciding whether you get to keep your home insurance. No human knocked on your door. No adjuster walked your property. An algorithm made the call, and you may never see the picture it used. This is not science fiction, and it is not coming someday. It is happening to homeowners across the country this year, and the robot gets it wrong more often than the industry likes to admit.

I am not here to tell you AI is evil. We use it ourselves at Trailstone to shop carriers faster and route your call to a real person sooner. Used well, it is a great tool. The problem is what happens when there is no person checking its work. Below are five real mistakes the AI robot is making with home and auto policies right now, and a calm, concrete way to protect yourself from each one.

Here Is the Short Answer

• AI is already running quietly inside most insurance companies. Surveys show roughly 88 percent of auto insurers and 70 percent of home insurers are using or planning to use it.
• The biggest risk is not the AI itself. It is AI making decisions with no human in the loop, on your coverage, your claim, and your price.
• The robot makes predictable mistakes: dropping policies from bad photos, denying claims in seconds, giving confident but wrong coverage answers, pricing you in a black box, and quietly removing the human who used to advocate for you.
• Your best defense is documentation and a human advocate. Keep records, ask to see the data behind any decision, and work with an independent agent who can shop your policy and push back on your behalf.

The Five Mistakes at a Glance

First, a quick reality check: AI is already everywhere in your policy

Before we get to the mistakes, understand how common this is. A survey reviewed by the National Association of Insurance Commissioners found that more than 70 percent of home insurers were already using, building, or exploring artificial intelligence. Other industry surveys put auto insurer adoption near 88 percent. Underwriting decisions that used to take three days now happen in three minutes.

Speed is not the enemy. A faster quote is a good thing. The trouble starts when speed replaces judgment, and a decision that changes your coverage or your claim gets made with no person involved. That is where the robot starts making mistakes that cost real families real money.

Mistake 1: Dropping your home policy from a photo

Insurers have always inspected homes. What changed is the method. Many carriers now buy satellite, airplane, and drone images, feed them into AI models trained to spot risk, and use the results to decide who keeps coverage. The model looks for moss, missing shingles, ponding water, debris in the yard, and tree limbs over the roof.

Here is the part that surprises people. The homeowner usually has no idea the inspection happened. In Texas, where this practice is common, non-renewal rates nearly doubled between 2020 and 2023, and AI-analyzed aerial imagery was a primary driver. According to NPR reporting, interviews and state investigations confirmed insurers there routinely use aerial images and AI to decide whether to keep covering a home.

And the robot gets it wrong. Documented errors include solar panels flagged as structural damage, debris on a neighbor's property counted against the wrong house, and at least one Texas homeowner who received a cancellation based on photos of a completely different home. The kicker: in most states, you have no legal right to see the image that was used against you.

Regulators are starting to respond. Louisiana now limits how old an aerial image can be when it is used to cancel or non-renew a policy. California has moved to require that insurers notify homeowners, share the image, and give them a chance to dispute it or show they made repairs. But the rules are uneven from state to state, so you cannot count on them yet.

How to protect yourself:

• Photograph your roof and exterior once a year, with the date visible. This is your evidence if an algorithm claims your roof is failing.
• Keep every repair and replacement receipt. A new roof should help your price, not get missed by a stale photo.
• If you get a non-renewal notice, ask in writing to see the image and the reason. You usually have about 30 days, so move fast.
• Call us before the clock runs out. With access to 40-plus carriers, we can often place coverage elsewhere while you sort out a bad photo.

Mistake 2: Denying your claim in seconds, with no human looking

Imagine two neighbors on the same street file similar claims after the same storm. One reaches a human adjuster who understands the situation. The other gets a denial generated by software in about a second. Same storm, very different outcome, and the difference was whether a person looked at the file.

This is already a courtroom fight. Lawsuits against large health insurers allege that automated tools denied hundreds of thousands of claims with little individual review, in some cases spending barely a second per file. One analysis found certain AI systems denying claims at up to 16 times the rate of human reviewers. The same automation is now spreading into home and auto claims, where a model can recommend a denial by comparing your reported damage to old satellite images, sometimes before any adjuster sets foot on your property.

The lesson is not that every claim gets denied. Most do not. The lesson is that when a denial does happen, you need a human who can question it.

How to protect yourself:

• Document the loss the moment it happens. Photos, video, dates, and a written timeline. The robot respects records.
• Call your agent before you file. We help you understand what is covered and what to expect, so you are not guessing.
• If a claim is denied, ask whether a human reviewed it, and request the denial reason in writing.
• Appeal in writing, with your documentation attached. A well-documented appeal is hard for an algorithm to wave away.

Mistake 3: Giving you confident, wrong answers about your coverage

This one is sneaky because the robot sounds so sure of itself. AI chatbots are built to produce fluent, confident answers. When they do not know something, they sometimes invent it. The industry calls this a hallucination. It does not look like an error. It looks like a competent reply.

Here is the example that should worry every homeowner. Suppose you ask a chatbot, "Does my homeowners policy cover flood damage?" and it cheerfully says yes. Standard home insurance does not cover flood. You only find that out after the water recedes, when it is far too late to fix. The same goes for people typing coverage questions into general AI tools. Those tools have never read your specific policy, and testing has shown wrong-answer rates that are nowhere near reliable enough to bet your house on.

Use AI to learn the basics. Do not use it to confirm what your policy actually covers. Only your declarations page and policy language can do that, and a human can read them with you.

How to protect yourself:

• Never confirm coverage with a chatbot. Confirm it against your real policy.
• Ask for answers in writing. If it is not documented, it does not protect you at claim time.
• Watch for the obvious gaps: flood, earthquake, sewer and water backup, and roof settlement based on age. These are the ones AI most often gets wrong.
• When in doubt, ask a person. We will translate your policy into plain English and put our answer in writing.

Mistake 4: Pricing you in a black box no one will explain

Your rate increasingly comes out of a model, not a person. These models can pull from telematics in your car, smartphone driving data, public records, and more. The promise is fairer, more personalized pricing. The risk is that the logic becomes a black box, even to the company using it.

Two problems follow. First, no one can clearly explain why your price went up. Second, a model can quietly discriminate without anyone intending it, by leaning on data that acts as a stand-in for things like income, neighborhood, or other protected characteristics. This is not a fringe worry. Industry surveys found that nearly one-third of insurers do not regularly test their own models for bias. States like Colorado have passed rules requiring insurers to test for and prevent unfair discrimination in these systems, but enforcement is still catching up.

You cannot open the black box yourself. What you can do is refuse to let a single algorithm have the final say on your price.

How to protect yourself:

• Shop more than one carrier. Every company uses a different model, so prices vary widely for the exact same person.
• Understand any telematics program before you opt in. Know what data it collects and how it can affect your rate.
• Ask why your rate changed. You are allowed to ask for the factors behind an increase.
• Let an independent agent run the comparison. One model should never get the last word on what you pay.

Mistake 5: Removing the human who used to fight for you

This is the mistake underneath all the others. Every story above has the same root cause: a person was taken out of the loop. As one consumer advocate put it, the industry is "losing the human touch" in how policies are bought, serviced, and adjusted.

When everything runs through automation, there is no one to notice the photo was of the wrong house, no one to question the one-second denial, no one to catch that the chatbot was wrong about flood. A captive agent who sells one company's products, or a direct-to-consumer app, is often just a friendlier front end on the same algorithms. The independent model is different. We do not work for a carrier. We work for you. When the robot makes one of these five mistakes, you want a person on your side who can pick up the phone, document the problem, and move your coverage somewhere better if it comes to that.

How to protect yourself:

• Keep a real, independent advocate. Not a chatbot, and not an agent tied to one company.
• Ask who reviews your policy each year. A person, or a program?
• Make sure someone shops your renewal for you. At Trailstone, our annual TRAC review re-shops your coverage across 40-plus carriers so you are not stuck with one company's algorithm.

Frequently Asked Questions

Is it legal for my insurance company to use AI and drone photos?
Yes. Reviewing your property is part of underwriting, and aerial imagery is a newer, cheaper version of something insurers have always done. What is changing is regulation. Some states now limit how old an image can be and require insurers to share it with you, but the rules vary widely by state.

Can I find out if AI made a decision about my policy?
You can ask, and you should. Request the reason for any non-renewal, denial, or rate increase in writing, and ask whether a human reviewed it. A growing number of states require insurers to explain adverse decisions, especially when AI was involved.

Should I just stop using AI for insurance questions?
No. AI is fine for learning the basics and asking general questions. Just never use it to confirm what your specific policy covers. For that, rely on your actual policy and a person who can read it with you.

My rate went up and the company blamed "the model." What do I do?
Ask for the factors behind the increase, then shop. Because every carrier uses a different model, the same driver or homeowner can get very different prices. Letting an independent agent compare options is the simplest way to keep one algorithm from setting your price by default.

What is the single best thing I can do to protect myself?
Document everything and keep a human advocate. Dated photos, receipts, and written confirmations beat an algorithm almost every time, and a real person can put them to work on your behalf.

Does AI ever help me as the customer?
Absolutely. It can speed up quotes, find discounts faster, and route your call to a real person sooner. We use it that way at Trailstone. The goal is not to ban AI. It is to keep a human in charge of the decisions that matter.

I own a small business. Does this affect my commercial insurance too?
Yes. The same automated claim denials are showing up on the commercial side, and some carriers are now adding exclusions that limit coverage for AI-related mistakes your own business might make. If you run a company, this is worth a conversation. Our commercial team can review where you stand.

How does Trailstone keep a human in the loop?
A real person answers your questions, reviews your coverage, and handles your claims. Every year, our TRAC review re-shops your policy across 40-plus carriers and gives you a written summary, so you are never left alone with an algorithm.

What to Do Next: Your AI-Proofing Checklist

• Photograph your roof and home exterior once a year, with the date visible.
• Keep a folder of repair receipts and major improvements.
• Pull your declarations page and confirm what is actually covered, especially flood, water backup, and roof settlement.
• Never confirm coverage with a chatbot. Get it in writing from a person.
• Shop your renewal across multiple carriers so no single model sets your price.
• Know who reviews your policy each year: a real person, or a program.
• Ask for the reason, in writing, behind any denial, non-renewal, or rate increase.

The Bottom Line

AI is not going away, and that is fine. The right goal is not to fight the robot. It is to make sure a human is still in charge of the decisions that affect your home, your car, and your family. That is exactly what an independent agent does. We teach before we sell, we explain the why first, and we document what we recommend so you are not guessing when it matters most.

If you want a person to look over your coverage and tell you, in plain English, where you stand, reach out through our website at trailstoneinsurance.com or give us a call. Trailstone will provide a complimentary review of your insurance and a written summary for your records, so you have a clear, calm picture instead of an algorithm's best guess.

Written by Mark Rodgers, President and Founder, Trailstone Insurance Group