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Professional indemnity explained
A Hometrack AVM is an automated valuation model that, according to Hometrack, produces instant property valuations for mortgage lending decisions. It matters because valuers increasingly work alongside AVM figures, and the RICS AI standard now shapes how AI is recorded, relied on and described to clients.
Part of: Surveyors PI insurance
In short
Hometrack says its AVM and Digital Valuer models support lender decisions at scale, with more than 50 million valuations a year. The RICS standard on responsible use of AI, effective 9 March 2026, does not mention AVMs, but it does cover third-party AI systems that materially affect a surveyor's work. Section 4.3 requires terms of engagement to state, if available, the extent of PI cover for AI use. Surveyors' PI usually responds to negligent valuation claims subject to the policy terms, whether or not a tool was involved, so the record of human judgement matters.
Hometrack describes several models on its AVM page. In plain terms, an AVM takes property data and recent market evidence and returns an estimated value without anyone visiting the property. Everything below is Hometrack's own description, read on 6 November 2026, not an independent assessment.
On scale, Hometrack says it performs "more than 50 million valuations each year", including "24 million Portfolio AVMs per year" and "1,600 mortgage origination AVMs each working day", and that "18 of the top 20 UK mortgage lenders" choose its AVM. On accuracy, Hometrack says "80% of our valuations are within 10% of the surveyor's recommended value" and that it tests performance against surveyor valuations across "c.75% of the mortgage market".
The page talks about adjusting "the boundaries between confidence levels and loan-to-value percentages" but gives no numeric confidence score. Hometrack says it is accredited by "Moody's, Standard & Poor and Fitch", which are ratings agencies rather than regulators. The page does not mention RICS, the PRA or the FCA, and it does not mention desktop valuations.
In lending, an AVM and a surveyor's valuation usually do different jobs. The AVM gives a fast figure that a lender can use within its own rules; the surveyor gives a professional opinion of value, usually after an inspection. Hometrack's own comparison point is the surveyor's figure, which says something about where the benchmark still sits.
RICS looked at this in its April 2022 insight paper on automated valuation models. The paper is not mandatory and says it "does not set out to provide formal guidance". It argues for "a 'human in the loop'", asks "whether the output of an AVM should ever be described as 'market value'", and describes "AVM outputs augmented by valuers providing desktop or drive-by valuations". That hybrid picture is where most valuers meet AVMs in practice: as a figure on file, a starting point, or a check.
For more on how AVMs are used across property work, see AVMs for surveyors and AI valuations and AVMs for estate agents.
The RICS professional standard Responsible use of artificial intelligence in surveying practice (1st edition, September 2025) is effective from 9 March 2026. RICS's launch release says it "sets out mandatory requirements and best practice expectations" for members and regulated firms. It is a conduct standard and "does not cover the detailed and technical use of specific forms of AI".
To be exact about AVMs: the words "AVM", "automated valuation model" and "Red Book" do not appear anywhere in the standard. "Valuation" appears twice, once in section 1.1 as an example of a specialist area of practice and once in the glossary. The standard does, however, clearly cover AI systems "developed and provided by third parties".
| Section | What it requires |
|---|---|
| 1.2 Scope | Applies to AI outputs that have a "material impact" on service delivery; firms must record that determination and the reasoning. |
| 3.2 AI register | A written register of AI systems with material impact, including third-party systems, their purpose and the date first used. |
| 3.3 Risk register | Reviewed and updated at least quarterly. |
| 4.1 Procurement | Detailed due diligence before procuring a third-party AI system with material impact. |
| 4.2 Reliability | A written decision on whether an output can reasonably be used, made by or under the supervision of a named, appropriately qualified surveyor. |
| 4.3 Clients | Written notice in advance of AI use, and terms of engagement covering AI use, contest, redress, opt-out and, if available, PI cover. |
Our reading, not a statement from RICS: an AVM is a machine learning system, so whether a firm's use of one falls within scope turns on the standard's general definition of AI and its material impact test. A firm that uses an AVM output to shape its own valuation opinion should consider that test and record its decision. The standard does not deal with AI outputs supplied by others, such as a lender's AVM figure in an instruction; its reliance rules in section 4.2 apply to outputs of AI systems the member or firm uses.
RICS has also published draft practice guidance, AI in real estate valuation, for consultation from 3 November 2026 to 15 December 2026. It addresses AI in valuation under Red Book Global Standards and builds on the AI standard. The landing page does not mention AVMs, and it remains a draft. More detail is in what the RICS AI standard means for PI.
Overvaluation claims are usually brought by a lender after a borrower defaults and the security falls short. Surveyors' PI usually responds to a claim alleging negligence in professional services, subject to the policy terms, limit, excess and any conditions. Using a tool does not usually change the basic question, which is whether the valuer's opinion met the standard of a reasonably competent valuer. See overvaluation and missed defect claim examples.
A valuer has an AVM figure on file and adopts a value close to it, with thin comparable evidence. The property later sells well below that figure and the lender claims. The defence will rest on the valuer's own evidence and reasoning. A written reliability decision under section 4.2, if the AVM fell within the firm's scope, helps show that judgement was exercised.
A lender's instruction includes its own AVM figure. The standard's reliance rules do not address that output, but the valuer's ordinary duty of care still applies. Anchoring to a figure supplied by someone else is a familiar risk that predates AI.
Insurers may ask about AI use at proposal or renewal, and wordings vary. Check how your policy treats AI-assisted work against the points in RICS PI wording and AI claims and the RICS PI requirements.
Section 4.3 asks you to tell clients, if available, the extent of PI cover for AI use. That is a statement of fact about your own policy, so it needs to be accurate.
Useful next reads: AI terms of engagement clauses, the RICS AI compliance checklist, cyber insurance for surveyors, the surveyors AIpedia, our surveyors PI insurance guide and the AI tools by profession hub.
Apex arranges surveyors' and valuers' PI and cyber cover; a broker reads every enquiry.
The standard's text does not mention AVMs, automated valuation models or the Red Book. It does cover third-party AI systems that have a material impact on a surveyor's work. Our reading is that whether a firm's use of an AVM falls within scope depends on the standard's general AI definition and material impact test, and the firm should record that decision.
No. Section 4.3 requires terms of engagement to state, if available, the extent of professional indemnity cover for the firm's use of AI systems. The standard does not require firms to buy any particular cover, and the word insurance does not appear in it. Your broker can help you describe your actual position accurately.
Hometrack's AVM page says it is accredited by ratings agencies including Moody's, Standard & Poor and Fitch. Those are ratings agencies rather than regulators. The page does not mention RICS, the PRA or the FCA, so a valuer should carry out and record its own due diligence on any third-party AI system it uses.
Surveyors' PI usually responds to claims alleging negligent professional services, subject to the policy terms, excess and limit. The use of a tool does not usually change the core question of whether your opinion was reasonably competent. Check your wording for any AI exclusions or conditions and tell insurers about AI use if asked.
RICS draft practice guidance, AI in real estate valuation, is out for consultation from 3 November 2026 to 15 December 2026. It builds on the AI standard and covers valuations under Red Book Global Standards. RICS's 2022 paper on AVMs is a non-mandatory insight paper, not formal guidance.
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