Can Social Media Posts Make Your Insurance Cost More?

In January, New York became the first state to provide guidance for how life insurers may use algorithms to comb through social media posts—as well as data such as credit scores and home-ownership records—to size up an applicant’s risk. The guidance comes amid expectations that within years, social media may be among the data reviewed before issuing life insurance as well as policies for cars and property.   New York requires insurers to prove that any social media data used in underwriting is actuarially justified, logical for use and doesn’t unfairly discriminate against certain customers.

In is anticipated that someday, underwriters will assess potential customers with automated reports based in part on their social media use.  However, currently, the time and effort to monitor an applicant’s online presence can be costly, so few if any insurers are doing it yet in detail or at scale.

We suggest though, that people should be hesitant to post photos of risky behavior such as smoking or drinking alcohol  and instead play up boasts about healthy activities, like recent cycling trips or marathons.   Some life and car insurers are exploring whether consumers will share real-time health or driving data. Remember, a life insurer who took blood and urine samples already knows a lot about the customer. To develop friendly relationships, some insurers are offering perks like gift cards in exchange for reaching milestones in exercise and providing details about sleep.

On the car insurance side, many people are using mobile apps that track their driving habits, such as how often they slam on the brakes.  Some insurance carriers are using social media in handling claims. Insurers can check explanations of auto claims against Facebook testimonials about an accident. And they could challenge disability claims if posted photos from a ski trip, for example, contradict an impairment or illness.

Our advice to our clients is to think very carefully before posting and if posting on sites that allow private versus public access, always opt for private postings.