Is it Receipt or Deceit? How AI Fuels Fraudulent Property Claims

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Commercial Umbrella, Personal Umbrella, Property

January 21, 2026 Jonathan Nieman

Region: North America

English

While the benefits of artificial intelligence are undeniable, its power has the potential to disrupt through both legitimate and illegitimate innovations. The estimated number of AI‑enhanced insurance fraud cases in the U.S. increased from less than 20,000 in 2022 to more than 80,000 in 2025, and AI‑driven scams now account for over half of digital financial fraud.¹ Insurers must remain vigilant and anticipate how AI can be exploited to create new avenues for fraud.

In this blog, we explore a growing concern about AI’s ability to create fake, convincing receipts and documentation in Property claims, and outline steps insurers can take to detect and counter this emerging risk.

Invoices and receipts form the backbone of a Property adjuster’s daily workflow and claim analysis. Such documentation is critical for validating causation, documenting damage, confirming the repair or replacement of property, establishing the scope of work, and corroborating unit cost pricing. Now, picture a claims environment where no document can be taken at face value. An environment where every photograph, plumbing invoice, store receipt, lease agreement, bank statement, roof proposal, police or expert report, contractors’ estimate, tax return, or profit and loss statement has possibly been altered or completely fabricated with the assistance of an AI‑powered template generator. This is not technology of the future; it’s today’s reality. With little more than a Google search and a handful of simple prompts, anyone can access tools that can produce, in seconds, highly convincing, entirely manufactured or manipulated claim documentation supporting property loss.

The implications of this technology are serious and far-reaching, and open the door for a broad range of fraudulent scenarios, including:

Fabricated Property Losses – The outright, whole cloth creation of a property loss, complete with a repair invoice, photos, estimates, and hotel bills. These are specifically geared toward more minor, desk-adjusted losses.
Holdback Requests on Personal / Business Property Claims – Request for holdback monies on personal property claims where only some or perhaps none of the items have yet been replaced.
Holdback Requests on Reconstruction or Restoration Claims – Request for holdback monies on reconstruction/restoration claims where only some or perhaps none of the work has actually been performed.
Supplemental Claims – Providing invoices to show unit pricing and scope of work disparities higher and broader than the amounts initially allowed.
Theft and Vandalism Claims – Providing a police or incident report to verify the facts of the event, establish ownership, and itemize inventory of lost/stolen goods.
Additional Living Expenses Claims – Submitting supporting documentation for food/groceries, rental expenses, or hotel stays demonstrating incurred costs.
Business Income Claims – Providing inventory records or financial data to validate income, cost of goods, or continuing and non-continuing expenses.
Appraisal – Submitting contractors’ estimate(s) to substantiate the scope of work or unit cost pricing or expert reports to validate causation could prove compelling evidence to an umpire in ultimately determining the amount awarded.
Causation – An AI‑generated plumbing invoice or weather report could be a vehicle for a carrier to quickly and inadvertently accept coverage. A falsified fire report could divert the carrier’s attention away from a potential arson investigation.

The possibilities for exploitation are both insidious and limitless, turning everyday documentation into a landmine for Property claims handlers to navigate. What was once a straightforward, mundane process of itemizing, categorizing, reviewing, and validating claims submissions now carries the weight of identifying and expertly addressing potentially fabricated evidence.

Insurers must be alert and adapt to a rapidly evolving technological claims landscape. The rise of AI‑driven fraud requires not only awareness but also immediate, decisive action through the implementation of new practices and procedures that will strengthen existing safeguards and anticipate how this trend will evolve and grow in the years to come.

Here are practical steps that Property claims professionals can take now to stay ahead of this emerging risk:

AI Tools – Available AI detection services can evaluate text, images, audio, and video to determine whether it is machine-generated, altered, or manipulated. Integrating these tools into existing claims workflows or systems adds a layer of authenticity verification.²
Best Practices – Insurers should consider reviewing and refining best practices. Addressing which claims are appropriate to conduct recorded interviews or examinations under oath, conducting re‑inspections on questionable claims and/or substantial holdback losses, requiring affidavits and certificates of completion from contractors, performing claims reviews or spot check audits, and tightening protocols on desk-adjusted property claims are just a few investigative best practices that can be adapted in fighting digital fraud.
Appraisal – Ensuring documentation analysis and validation policies carry over to the responsibility of the company’s independent appraiser within the appraisal process should be a part of the insurer’s core best practices.
Special Investigations Unit (SIU) – Claim submissions that are over-documented, rapidly documented, or contain receipts/documentation with uniform appearance, distorted logos, or inconsistent font or formatting should be turned over to SIU for investigation.
Documentation Validation – Document metadata should be reviewed to determine the place and time of creation. Then, all information on the document should be reviewed and cross-checked for accuracy. Requiring digital watermarks on invoices or e‑signatures is also recommended.
Redundancy – Supplying both the proof of purchase/paid invoice and the corresponding payment verification (bank or credit card statement) should be required for authentication. Dates and times on these invoices and statements should then be cross-referenced for any inconsistencies.
Vendor Verification – Contractors, tradesmen, and experts should be contacted and spoken to as part of the process of verifying the scope, description, and cost of work. Checking phone numbers, email addresses, physical addresses, license numbers, and Employer Identification Numbers should also become standard practice.
Training and Awareness – Ongoing education on emerging AI trends should be instituted as mandatory, regular training programs.
Enforcement of Policy Language – Preparing and issuing the appropriate coverage letters that reference specific policy obligations (incurred costs, record examination, examination under oath) and investigating in accordance with those terms and conditions are essential.
Collaboration – Participating in industry events, sharing information between carriers, and partnering with fraud-fighting organizations are all recommended collaborative steps.
Disclosure – Insurers should openly disclose and share information about the tools at their disposal and steps being taken to increase resources to combat digital fraud.

Through continuous training and proactive implementation of sound policies, best practices, and technologies, insurers can stay ahead of the evolving challenges in AI fraud in Property claims.

My colleague Mike Pagenta wrote last year on litigation analytics turning data into a competitive advantage for Casualty insurers, highlighting one of the many ways AI is positively reshaping and enhancing claims handling.

Gen Re remains at the forefront of these emerging issues and is available to assist our clients with any questions or specific needs.