Methods and systems are provided for detecting loss of isolation of a motor, connections, or phase cables while an AC motor is operating. The system includes a power supply that is substantially isolated from the ground or chassis having a power supply voltage, and a power inverter electrically coupled to the power supply. The power inverter is configured to provide AC current from the power supply in an AC phase at an AC terminal, with the phase having current at a fundamental frequency that controls the motor speed. An electric motor is electrically coupled to the AC terminal of the power inverter and has a chassis that is substantially electrically isolated from the AC terminal of the power inverter under normal operating conditions. A processor is configured to control the AC current provided by the power inverter. The processor is configured to receive a first voltage signal related to current flowing through a motor chassis. The first voltage signal includes a first component related to the fundamental frequency of the phases, and a second component related to the power supply voltage. The processor is further configured to filter the first voltage signal to attenuate the second component, to measure an amplitude of the first component, and to determine if an AC loss of isolation condition exists by comparing the amplitude of the first component to a fault value.