One-Third of Insurance Customers Embrace AI for Policy Decisions

A recent JD Power study reveals that nearly one-third of auto and home insurance customers are turning to artificial intelligence (AI) for various tasks, marking a significant shift in how consumers engage with insurance products. The inaugural JD Power 2026 U.S. AI Insurance Experience Study found that 29% of customers utilize AI tools for researching policies, managing accounts, and understanding coverage prior to claims. This trend signals a transformative moment for the insurance industry, as AI becomes an integral part of the customer experience and decision-making process.

The study highlights that customers are increasingly relying on AI for both insurer-provided and third-party tools. Among those using AI for research, 34% accessed tools from their insurers, while 33% turned to third-party applications. When seeking quotes, 25% utilized insurer tools, compared to 21% who opted for third-party solutions. Notably, while 27% of customers used insurer-provided tools for account servicing, only 8% engaged with third-party options. This dual reliance underscores the competitive landscape where insurers must not only enhance their own offerings but also be mindful of how third-party tools influence customer decisions.

The implications of these findings are profound. Over one-third of customers who researched using AI adjusted their policies based on insights gained, with 42% of those shopping for new policies ultimately making a purchase influenced by AI. This indicates that AI is not merely a supplementary tool but a decisive factor in shaping consumer behavior. Insurers must adapt to this reality by ensuring their AI offerings provide comprehensive and user-friendly experiences. As Tony Soloman from JD Power noted, the evolution of AI tools presents both a challenge and an opportunity for insurers to enhance their digital interfaces.

Despite the growing adoption of AI, significant barriers remain. A majority of customers—71% for research, 75% for quotes, and 87% for claims—are still not utilizing AI tools. The primary reasons cited include unfamiliarity, habitual preferences, and a lack of trust in AI-generated results. This suggests that while the potential for AI in insurance is substantial, there is still a considerable gap to bridge in terms of customer education and trust-building.

Demographic factors also play a critical role in AI acceptance. Younger customers, particularly Gen Z and Millennials, exhibit greater comfort with AI for account management and research tasks. This generational divide indicates that as younger consumers become a larger segment of the insurance market, their preferences for AI-driven interactions will shape the future strategies of insurers.

Looking ahead, the insurance industry must prioritize the development of AI tools that not only meet customer needs but also build trust. As Eric McCready from JD Power pointed out, the next few years will see insurers investing heavily in AI capabilities to help customers navigate complex insurance landscapes. The effectiveness of these tools will ultimately determine the future of customer engagement in auto and home insurance. Insurers that can successfully integrate AI into their value propositions will likely gain a competitive edge, while those that fail to adapt may struggle to retain relevance in an increasingly digital marketplace.