Have you ever gotten the feeling that insurance companies know a lot more about your personal life than they let on? Rumours have circulated for some time that insurance companies are keeping tabs on our social media accounts. But, is there any truth to this?
And how does it affect you?
Here’s a scary thought:
It doesn’t matter where you are or what you’re doing, chances are pretty good that it’s being recorded in one way or another. The internet, for example, contains much more information about us than we would care to realise, and any of that information can be accessed, given the right amount of motivation.
Such is the diabolical nature of an exceedingly connected world. Everything we do on our computers or smartphones or tablets all contributes to Big Data, a huge, expanding tome of information.
The internet is a great resource for those looking to gather said information (we can now stare directly into any nightmarish, glowing rectangle and watch the collapse of civilization in real-time), but it also poses a problem, in that this information - about us - can be mined by organisations or individuals, and used however they see fit.
See, we surrender our rights to a certain amount of privacy when we take to the internet, and particularly social media, and this allows other parties a certain amount of access to our ‘personal’ lives.
Big Data knows where we are, where we shop, where we eat, the routes we drive, etc. What we put on social media moves into the public domain, and unfortunately for you – Out Drunk With My Boyz At Hooters Three Hours Before My Car Crash Group Selfie – we don’t have much control over that.
Imagine what insurance companies could do with all that information? To pick your exercise routines and diet apart before granting your life insurance? To look into your genetic code and medicinal habits?
Luckily for us, in South Africa we have laws.
Many people have had negative experiences when the time has come to claim. Or, they have a negative perspective on the insurance industry as a whole. We’ve all heard horror stories, but this stuff is largely myth, or a result of misunderstanding. Generally speaking, insurance companies pay up without much trouble. This is, however, a business… And would you willingly pay up if somebody were trying to dupe you?
Insurance is a gambling game, and just like casinos, cheating isn’t taken very lightly. Insurers may not drag you out back and break your kneecaps with a ballpoint hammer, but they have the right to deny your fraudulent claim.
The entire insurance game is based on trust. Policy holders who make inflated or deceitful claims abuse that trust and make everything more difficult for the honest folk. For these reasons, insurers will gather information on you and also verify that information when you apply for cover, as well as when you claim.
An example, let’s say your son, who had been driving drunk and wrapped your BMW around a tree, posted about it on his Facebook.
You then file a claim and tell the insurer some story about you driving on a slippery road, blah blah blah. The insurer then investigates the claim and finds your son’s Facebook post.
Bingo. Claim rejected. Because you’re a liar.
Now, if insurers weren’t checking these things they would simply pay out, causing premiums to go up for everybody else. In a sense, these measures are protecting honest people, as well as the insurer.
Although all of this information is widely available, South African law puts limitations on how it can be used. Insurance companies are not permitted to cross a line and infringe upon your privacy rights. They’re not allowed to sneak around or gather information in underhanded ways, such as hacking, wire-tapping, etc. They have a number of avenues they may utilize to collect information.
Their primary source is that which you provide them with on your application form, over telephone discussions, when you take out any cover and on the form you complete when submitting a claim.
Questions on the claim form may include matters that go beyond the actual claim. The answers you provide will be compared to what they have on record, and presumably, everything should match.
Information in the public domain can be gathered from a number of sources. These include police records, property ownership, etc. as well as the endless well of data that is the internet. Insurers may use this to corroborate the information you’ve provided them with.
Insurance companies, of course, do not have direct access to your social media accounts, but they will dig deep until they find a post that your friends may have shared, or a photo that’s been forwarded. We can restrict our privacy settings, but we have no control over how our friends share our information.
Other methods of information gathering may include:
1. Private Information Accessed With Your Consent
An insurer may have a clause stating that they have the right to request access to your personal banking or medical records. You may be asked to provide this consent when claiming. If you don’t grant them permission, it may appear suspicious and the insurer may even obtain a court order to access these records.
Your credit history is also private, but permission to access this is required upfront. You will typically be required to disclose any abnormalities before the insurer agrees to cover you. This history will be used to evaluate your level of risk, and subsequently determine your premium.
2. Loss Adjustors
Specialists may be brought in to assess your claim. If you’d had a house fire, they’ll come in to investigate how the fire started. Burglary might involve them checking your home security such as alarms or burglar bars. The higher the claim is, the more thorough the investigation. They’ll look at police or fire department records, any financial motives you might have, etc.
If the loss adjustor reports any inconsistencies to what you’ve reported in your claim, that’s a red flag.
3. Insurance Companies Will Share Information
The South African Insurance Association has created a database called the Insurance Data System for short-term insurers. This gives them access to your claims over the past seven years across all insurers, and therefore also any trends which may have emerged. The IDS was designed to combat fraud, and you can read more about how it works HERE.
According to MoneyWeb, who reported on this very subject a couple of years ago, only two South African insurance companies have admitted to using social media at the assessment stage. It may be that some insurers are still reluctant to use this kind of approach, or it could be that they are concerned about privacy rights, or flouting laws that forbid the interception of communication.
Most insurance policies, however, require us, at claims stage, to provide all proof of what has occurred. Therefore, consent to use information in our social media accounts could be implied. And as stated before, pretty much everything we put online is already in public domain, and therefore no longer private.
This may work for sniffing out fraudulent claims, but how will it affect honest claims in the future?
Let's say you've posted photos of the interior of your house or security system, and you're then promptly robbed. Or let's say that you declare for the world to see that you’ll be on holiday for two months, and your house will be left unoccupied. Could this be construed as reckless, and held against you?
The best we can hope for is that these companies use the information they find responsibly, and be mindful of everything we do ourselves. Every time you sign up, log in or click ‘I Agree’ – you’re relinquishing your right to complete privacy.
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