Insurers increasingly use artificial intelligence and predictive models to price policies, handle claims, and flag fraud, according to the National Association of Insurance Commissioners. Telematics programs, apps, and plug-in devices that track how you drive add another layer by scoring some drivers and feeding the result into their rate.
For drivers, this can impact the policy price you are quoted, and how a claim gets handled after you file. The rules of how insurers use AI are still being developed, and how much protection you have when those systems get it wrong depends on your state.
Predictive models
Your driving record, your vehicle, your location, and the coverage you pick still drive the premium, but insurers now layer predictive models, including machine learning, on top of those factors to sharpen the number.
Automated systems can also help manage and evaluate claims, and fraud units use them to scan large volumes of data for suspicious patterns. Faster handling can work in your favor. The trouble starts when the model gets it wrong.
Telematics
The app or plug-in device is pitched as an easy path to a lower rate. Maryland’s insurance regulator surveyed how those programs actually played out. Among 2023 policies enrolled in a telematics program, about 31% saw a premium decrease tied to their driving score, roughly 24% saw an increase, and around 45% saw no change at all.
The regulator cautions that those figures reflect the telematics score itself, so a policy’s overall premium can still move for other reasons. Every program the state reviewed scored drivers through a fully automated process, and the data collected includes speed and braking, location and time of day, and phone handling.
Enrollment climbed to about 13% of Maryland policies in 2023, and it is still growing. Opting in is generally the driver’s choice. Maryland law largely bars insurers from requiring participation as a condition of coverage. Most programs let drivers review trips in the app and flag mistakes, such as a drive logged while they were only a passenger, within a short window.
Oversight
The NAIC model bulletin on insurers’ use of AI has been adopted by 24 states and the District of Columbia, and it asks companies to run written governance programs, keep those systems under the same insurance laws that govern human decisions, and build processes for notifying affected consumers when AI systems are in use.
Regulators also began piloting an evaluation tool across 12 states in March 2026 to examine insurers’ AI systems, including governance, data practices, and higher-risk models. The NAIC’s position is that AI changes none of an insurer’s legal obligations.
What the guidance does not do is hand every driver a new, direct way to appeal an automated decision. That still depends on your state’s existing rules.
Human intelligence
In spite of AI and telematics programs, rates vary widely from one insurer to the next, so comparing quotes at renewal is one of the most practical ways to look for a lower premium. Insurers count on you being too busy to shop around. But Insurify has fixed that, you need to take the next step.
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When a claim decision looks off, ask whether an automated score played a part, what information drove the result, and what options you have to dispute inaccurate data. Whether you can insist a person takes a second look depends on your state, because no nationwide rule guarantees it.
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