Insurers and police are using information from
to nail policyholders for filing inflated or fraudulent claims.
What’s now up for discussion is the controversial idea of calculating premiums using information from social media.
Insurers aren’t doing that now because rate-setting regulations don’t allow it. But some say information on social networking sites would give the companies a better sense of the risks they’re taking and reward less-risky policyholders with lower premiums.
Some recent cases show how social media can help insurers.
A St. Lucie County woman filed a claim with her auto insurer, saying a hit-and-run driver damaged her car. Investigators discovered comments on her Facebook page indicating that her daughter was responsible for the accident, according to the office that oversees the state Division of Insurance Fraud.
The policyholder was convicted last month of filing a fraudulent insurance claim, a spokeswoman said.
After a Tampa traffic accident, a police investigator noted that two people who had been in separate cars in the crash had listed each other as "friends" on Facebook. One had even referenced the accident there, according to Ron Poindexter, of the National Insurance Crime Bureau.
Investigators confronted the policyholders with the information and they confessed, he said. They’ve been charged and a warrant is out for their arrest, Poindexter said.
Social media can confirm claims, too. A policyholder near Tampa filed a claim after a car crash, but the photographs didn’t seem to show damage to the car, said Michael Packer, an attorney with Marshall, Dennehey, Warner, Coleman & Goggin in Fort Lauderdale. The firm works for several insurers on claims disputes.
He checked the policyholder’s Facebook page, something he routinely does when researching claims.
"I saw a number of messages in which friends of the claimant were posting messages of well wishes," he said. "At the same time, the claimant had posted some updates on her recovery. … So by investigating … on Facebook we were able to verify the claim."
Even if a policyholder’s social media profile is private, a court can approve an order allowing access to the profile for a limited time, said Anna Alexopoulos, a spokeswoman for the office that oversees the insurance fraud division.
Insurers don’t use social media to assess risk yet, but they should consider it, said Mike Fitzgerald, a senior analyst at Celent, an insurance research and consulting firm headquarted in Boston.
It "creates a picture of how risky, or in my boring life, how unrisky [people are]. … It allows insurers to collect information at a much more detailed level," he said.
Insurers already have "pay as you drive" policies. For instance, just this year, Progressive started offering discounts to policyholders in Florida if they install a device in their car that measures how much they drive.
Similarly, life insurers ask applicants whether they exercise regularly. "I might say ‘yes’ on the application, but I can also give the insurer the ability to validate that through Foursquare," Fitzgerald said.
Regulations prevent insurers from directly using social media to set rates, Fitzgerald said. But regulations change. Some states once barred insurers from using credit scores to predict the likelihood of claims, but most now allow it.
Now insurers must tell consumers if their credit score hurt their coverage options or premiums. That gives customers a chance to appeal incorrect information or buy policies from a company that doesn’t use credit scores.
A similar standard seems fair for social media, said Miguel Lopez, an active social media user in Miami.
Lopez, a programmer for a medical supplies company, said he knows his social media presence could hurt him if his health insurer, for instance, were to use the information to set his premiums. His Twitter posts often broadcast where he’s having lunch, including restaurants like Kentucky Fried Chicken and Latin Burger And Taco Truck.
"If I’m putting that information out on my own, then I don’t have a right to claim they invaded my privacy," he said. "I wouldn’t deny they have a right to research me … but if it’s going to affect my business with them, they need to disclose that before they use it."
Fitzgerald said including information from social media could result in big savings for insurers and their customers.
Insurers wouldn’t use social media research to deny coverage or cancel a policy, he said, but they could ask questions. For instance, several South Floridians admitted Friday on Twitter to not wearing seat belts, and one Twitter user from the area wrote: "You can’t be a thug with your seat belt on. Trust me."
If any of those Twitter users apply for automobile insurance, a company could ask about sea tbelt habits.
Still, social media could leave out critical context. For instance, a life insurer might be scared away from an applicant who reports "liking" a skydiving magazine on Facebook. The insurer wouldn’t know if the applicant was a skydiver or a friend of someone who works for the magazine. Someone might tweet that they’re at their favorite bar, but skip telling friends they’re at the gym.
Another basic drawback for insurers: There’s no way "for a company to know for certain that they are reviewing the right person’s information," said Marissa Buckley, director of marketing for Security First Insurance in Ormond Beach.