social media and insurance rates

Brokers: Your clients may not know that their social media activities could influence their life and disability insurance underwriting and claims. Take the opportunity to educate them by sharing this article!

Who’s Looking at Your Social Media?

Is your social media account carefully cultivated to make your life look as thrilling as possible? While this may impress your online friends, insurance professionals may have a different reaction. More and more, social media is being used in insurance decisions, and what you post could come back to haunt you.

Most people post things on social media because they want to share the information with their friends. However, many of these posts are public, which means your friends aren’t the only ones who can see them.

It’s no secret that employers often like to take a peek at an applicant’s social media account before making a job offer. Other employers may look at social media to see if a worker who called in sick is actually sick. Because many people document nearly everything they do online, this can be an effective way of uncovering details that employees might not provide willingly.

Insurers are coming to the same conclusion.

The New York Department of Financial Services has released guidelines on how life insurers can use public data – like social media – in underwriting and premium determination.

The Social Security Administration also uses social media monitoring. According to AARP, the Social Security Administration may use social media monitoring when fraud is suspected, and back in 2019, the organization began looking into making social media monitoring a more routine part of its claims review process.

What Does Your Social Media Reveal?

Your social media account may reveal more than you realize. In some cases, social media can uncover blatant fraud. If you claim that your injuries are so severe that you can barely get out of bed, but then you post pictures of yourself dancing and hiking, it’s clear that something’s not adding up.

Social media can also reveal high-risk activities. On your application, you say you don’t smoke and rarely drink, but your social media account shows you downing shots and using marijuana. Or maybe you list your low-risk occupation as a receptionist but leave out your high-risk hobby as a rock climber. A social media check can turn this up.

How Could Insurers Use Social Media?

There are two basic ways insurers could use social media.

  • When someone applies for insurance, the insurer may use social media data to determine risks. This could potentially lead to a denial of the application or a higher premium rate.
  • When someone files a claim, the insurer may use social media as part of the investigation. This has been used to detect various types of insurance fraud.

What Does This Mean for Consumers?

People need to be careful about what they post online. Of course, no one should be lying on their applications or committing insurance fraud. But even if you’re being honest, your social media posts may give others the wrong impression.

According to ABC News, this may be what happened to a woman suffering from major depression and receiving disability benefits. After posting pictures of herself having a good time on vacation – based on her doctor’s recommendation that she should socialize more – the insurance company promptly cut off her benefits.

Most people try to make themselves look more glamorous and exciting on social media. Just keep in mind how insurers might view this.

Looking for more great info to share with your clients? Choose from our “Baker’s Dozen” of client handouts here.


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