AI Fraud in Auto Claims: Now Is the Time for Bold Collaboration

Generative AI is rapidly reshaping how businesses process information, make decisions, and serve customers. But when it comes to vehicle insurance claims, it’s also amplifying a long-standing challenge: claims fraud.

Fraud in auto claims costs the U.S. property and casualty sector an estimated $45 billion annually, according to the Coalition Against Insurance Fraud. That burden adds up to about $700 in extra premiums for each household (PropertyCasualty360, May 2024). And the problem is evolving quickly: The Guardian reported a 300% increase in AI-manipulated vehicle images submitted to one UK insurer in just one year (The Guardian, May 2024). If that stat holds true, it makes deterring auto claims fraud that more urgent of an issue to address, especially because of how GenAI can be used by bad actors to manipulate claims submissions.

With GenAI, bad actors have the ability to fabricate auto claims scenarios with alarming realism, doctoring photos, swapping license plates, or creating deepfake “walkaround” videos of damage that never occurred. In one case, they digitally altered a van’s image lifted from social media to add a cracked bumper, submitting it with a fake invoice for over $1,000 in damages. Investigators discovered the untouched original online, exposing the deception (The Guardian, May 2024). Tools like metadata analysis or image forensics aren’t foolproof fail safes: metadata can be stripped or spoofed, and forensic models can struggle to keep up with the pace of new generative techniques. Meanwhile, manual claim reviews can be slow and costly to scale.

Insurtech applications of solutions like UVeye exemplify how trust can be embedded directly into the claims process. Their approach uses a three-layer system to validate vehicle condition: multi-camera scans capture detailed, frame-by-frame imagery; encrypted digital fingerprints create a tamper-proof record; and third-party oversight adds impartiality to the verification process. This isn’t just about detecting fraud after the fact; it’s about creating deterrence. By establishing a trusted vehicle history, verifying damage through a third-party, and automating assessments, this approach could reduce false claims and streamline workflows—driving both accuracy and efficiency, while also safeguarding integrity. Taken all together, these elements shift the claims process from one that reacts to deception to one that could neutralize it—while also creating a faster, fairer experience for legitimate claimants.

No single solution can address this risk on its own; collaboration among stakeholders across the risk management and insurance ecosystem is essential. That’s why The Institutes’ RiskStream Collaborative is developing scalable, systemic tools like RAPID X, which enables secure, private permissioned exchange of first-notice-of-loss data among carriers during a mutual event. At the same time, RiskStream’s AI Council brings together insurers, insurtechs, and research organizations to identify common AI use cases, such as fraud prevention, and to promote ethical, multiparty solutions that protect private data.

Together, these initiatives form the backbone of a more resilient claims ecosystem, one built on trusted data, shared standards, and aligned incentives. As generative AI continues to reshape the landscape, the industry must meet this moment with bold, coordinated action. Combating fraud is only the beginning. The real opportunity lies in transforming claims into a faster, fairer, and more secure experience for all stakeholders, insurers, service providers, and most importantly, policyholders.

Works Cited

Coalition Against Insurance Fraud, 2023 Annual Report. 
Ashley Hattle-Cleminshaw, PropertyCasualty360, “Fraudsters using AI to manipulate images for false claims,” May 8, 2024. https://www.propertycasualty360.com/2024/05/08/fraudsters-using-ai-to-manipulate-images-for-false-claims  
Rupert Jones, The Guardian, “Car insurance scam: fake damage added to photos,” May 2, 2024. https://www.theguardian.com/business/article/2024/may/02/car-insurance-scam-fake-damaged-added-photos-manipulated 
Nicos Vekiarides, Insurance Journal, “Deepfake Fraud Is on the Rise. Here's How Insurers Can Respond,” July 17, 2024. https://www.insurancejournal.com/news/national/2024/07/17/784226.htm 
UVeye Research, 2025 White Paper.
The Institutes RiskStream Collaborative: RAPID X and AI Council Initiative Overview.