Your social media accounts might seem to be completely hidden from your auto insurance company. Your insurer will not see your Facebook page, Twitter tweets, and Bebo photos and videos. This has been the case so far. However, most insurance companies have largely ignored social media sites. But the landscape is changing. Social networks are being increasingly used by companies to find out more about their policyholders.
We’ll be explaining how car insurance companies use social networking sites and the ways they plan to make the most of the information. This trend is expected to continue growing in the future.
Auto Insurance Companies Expand Their Data Pool
To calculate your premiums, auto insurers use your driving record and your living address. They also consider the type of vehicle that you drive. These information allow them to predict how likely you will be to file a claim. If your driving record is clean, it’s less likely that you will cause an accident. A vehicle with a low claim history is more likely to sustain insurance losses than one that has had a lot of claims.
Consider the other information that insurance companies may find useful. Consider, for example, if a policyholder is part of one of the Facebook groups called “Driving Fast” and “Driving While High”. Both could indicate a greater risk of losing insurance. If companies discover that their policyholders belong to such groups, they may increase their rates or deny coverage.
But is it too much? What personal information should be kept private from insurers? This question can be answered by reviewing the information used by car insurance companies.
The Effect Of Regulations on Insurers
Insurance companies in all provinces and territories have to adhere to certain regulations when they calculate rates. Ontario, for example, prohibits insurance companies from using information such as credit history, employment status, credit history and car ownership versus lease agreement. Similar regulations are in place in other provinces. This is an important point to keep in mind as more insurers search online for information on their policyholders.
Although social networking sites like Facebook and Twitter have been around for years they are still new territory when it comes to collecting data to determine rates. There are not many regulations to address these issues. While this is likely to change, the direction of how it will happen remains unclear. Insurance companies will be allowed to take photos from your Facebook account in order to determine your rates. They will be allowed to spy on your Facebook accounts the same way that a private investigator photographs individuals suspected of fraud in disability insurance.
As insurers continue to use social networking sites to track their policyholders, these and other questions need to be answered. These issues will likely be handled differently by each province or territory.
Car Insurance Companies will Increasingly Use Social Media
Insurers who want to use social networking sites face a few hurdles, in addition to regulatory ones. It is not easy to identify who owns a Twitter or Facebook account for a policyholder. This is particularly true for people with common names. There may be hundreds of people named “Mark Jones” on these sites.
Second, being a member of certain social media groups doesn’t necessarily mean you are exhibiting bad driving behaviour. This is how insurance companies can determine if a policyholder who joins the Facebook group “Driving Fast” actually drives fast.
These problems will eventually be solved as technology improves the tracking capabilities for insurers. Insurance companies may eventually be able make risk-based decisions regarding coverage eligibility and rates, based on the social media connections of their customers.