A touch of nuance from someone in the industry (CTO at a startup that sells home and umbrella insurance):

Most of the issues here stem from problem the sales as opposed to the claims process. Customers are, structurally, under-educated on what their policies actually cover and this produces unrealistic expectations about what they should file claims for.

Emphatically, this is not their fault but an industry-wide issue that has complex causes like brokers/salespeople getting increasingly squeezed to produce as well as the intense time pressure under which many folks purchase their homeowners insurance policy (folks are often sprinting to check this box to secure a mortgage). Sadly, there is also a strong correlation between consumers experiencing worse socioeconomic conditions and failed claims. This, to me, generally suggests that some behavioral insights should be brought into the sale and management of the financial product to better protect these buyers' interests.

It is important to highlight and understand this point of failure because: 1) claims (even failed ones) are one of the easiest ways to get your rates jacked up as this is a category that insurers are allowed to price on. 2) The common response to articles like this is that "of course insurance should cover more things" but this counterintuitively risks creating more dead-weight loss for consumers broadly in the form of coverage for things that we simply shouldn't be insuring (and instead should be maintaining and replacing).

All that is to say: ask your broker / agent what's in your contract. Do it BEFORE you have a claim to file as in some cases speaking to them (especially captive agents) may in and of itself trigger a claim.

AI-native brokerages (like what we've built) are part of the solution to this problem since well-constrained LLMs can help buyers and users get a much better sense of what their contracts actually cover, and whether or not they should submit a claim.

What do you guys do when the LLM hallucinates? Someone puts a claim in on the basis of what the LLM instructed and its false, are you still taking responsibility? Geniune question, interesting to see where the liability is resting in a regulated industry as opposed to just chat bots.