Psychedelics are recognised for their therapeutic potential and ability to re-orient beliefs. However, the prospect that psychedelics can induce false or maladaptive beliefs has been under- considered. Here, we review experimental work on false insights and false memories. We then connect this to insights and belief formation under psychedelics using active inference. We propose that the acute plasticity associated with psychedelics increases the quantity and precision of insights and thence beliefs, including false ones. We offer directions for future research in minimising epistemic harm during psychedelics. Ultimately, knowing how psychedelics solicit false insights and beliefs is crucial if we are to optimally leverage their therapeutic potential.