55% of Gen Z Would Use AI to Alter Insurance Claims, Data Shows
More than half of Gen Z consumers would consider using artificial intelligence to digitally alter insurance claim documents in their favor, according to a March report from Verisk, an insurance data analytics company. The figure jumps to 55 percent for Gen Z, compared to 33 percent across all consumers.
Consumer advocates say the statistic reveals deeper problems with how the U.S. insurance system operates, not just a generational willingness to commit fraud.
Frustration With Claims Handling
Michael DeLong, research and advocacy associate for the Consumer Federation of America's Campaign for Fair Auto Insurance, attributes the trend to widespread distrust of insurers. "I think a lot of this frustration stems from people's perceptions that insurance companies aren't being held accountable," he said.
Recent enforcement actions support that view. In May, California's Department of Insurance announced violations against State Farm for mishandling claims from the 2025 Los Angeles wildfires, citing slow investigations, underpayments, unfair denials, and poor communication. The department is reviewing at least 398 violations, with potential penalties reaching $10,000 each.
DeLong said even a $4 million penalty amounts to a business cost for a company with $170 billion in net worth. "State Farm probably thinks that's just the cost of doing business, and will keep on doing this in the future," he said.
Economic Pressure on Younger Consumers
Gen Z members themselves acknowledge the tension between economic hardship and the temptation to game the system. Megan Snyder, a 28-year-old entrepreneur in Pennsylvania, said she wouldn't alter a claim but understands why others might. "It feels like the system wants us to lose," she said.
Snyder struggled to pay a $500 auto insurance deductible for a windshield replacement while managing vehicle debt. "The idea of financial stability was very different for older generations," she said.
Net written premiums for U.S. property and casualty insurers grew 4.8 percent to $971 billion in 2025, while the cost of living rose 3.8 percent over the same period. Gas prices alone jumped 12.8 percent in a single month due to the U.S. war in Iran.
The Fraud Feedback Loop
Jason Rogers, a 28-year-old content specialist in Florida, warned that increased fraud ultimately harms younger policyholders. "The solution to a broken system is not giving this system an excuse to further crack down on young policyholders," he said.
Insurance fraud costs consumers at least $308.6 billion annually, according to the Coalition Against Insurance Fraud. Higher fraud rates lead insurers to raise premiums, which increases costs for all consumers.
What Insurers Say About Anti-Fraud Efforts
Shane Riedman, president of anti-fraud solutions at Verisk, said anti-fraud systems exist primarily to protect the solvency of the insurance market, not just company profits. Twenty-three states require property and casualty insurers to maintain active anti-fraud plans.
Riedman called the 55 percent Gen Z figure "shocking" and said education could help. "I don't think that we do a very good job educating really anybody about how insurance companies make money," he said.
Most property and casualty insurers don't profit from premiums alone-they invest that money. Still, the industry saw a cyclical peak of 15 percent return on equity in 2025, suggesting healthy margins despite claims of low profitability.
Regulatory Solutions on the Table
DeLong advocates for stronger consumer protections, including banning rate factors unrelated to actual risk. Many insurers use credit scores to set premiums, a practice he says unfairly discriminates against lower-income consumers.
He also supports expanding prior approval systems-where regulators must approve rate increases before they take effect-to all states. Currently, only 15 states have this requirement for homeowners insurance, and about half have it for auto insurance.
For consumers who feel treated unfairly, DeLong recommends filing a complaint with their state insurance department. "The state insurance department is in charge of protecting consumers, making sure that insurance is affordable, making sure that consumers get treated fairly and that they aren't subject to unfair discrimination. This is their job."
Learn more about AI Fraud Detection systems and how they work to identify claim manipulation.
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