Insurers Will Use Your Facebook Posts to Raise Rates
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How are states regulating insurers' use of social media to set rates?
With your money briefing, I'm J.R. Whalen at The Wall Street Journal in New York. U.S. states are setting parameters as to how insurance companies can check out your social media posts to set your rates. But did you know they've been reviewing your Facebook and Instagram feeds all along? We'll have the details in a moment. First, these money and market stories you should know. If it feels like you're paying more at the gas pump, well, that's more than a feeling. The fuel price tracking website GasBuddy says the average price for regular gas was $2.54 a gallon on Monday.
Have insurers already been checking Facebook and Instagram posts?
That's up 4.5 cents from last week's average of $2.49 and almost 21 cents higher than last month's average of about $2.34. And GasBuddy says that gas prices could approach $3 a gallon before it's expected to peak in the spring. And the journal's Heard on the Street team says that Burger King may not get a jolt from its new subscription program that's tied to its coffee. For $5 a month, customers can get coffee daily, but Burger King limits that to a single small brewed coffee. It doesn't apply to iced coffee or anything else on the fast food chain's coffee menu. Heard on the Street also cites a recent review of the coffee, which ranked it ninth out of a list of ten, with the comment it had no flavor, except for a faint bitter note.
We told you earlier this year that New York became the first state to provide guidance for how life insurers could use algorithms to comb through social media posts among several forms of data to help determine an applicant's risk. But how likely is a simple social media post to drive up your rates? Wall Street Journal reporter Ellen Byron is here with some answers. So Ellen, this isn't as simple as push send and a higher bill arrives in the mail. Insurers actually have to have a good case for using social media content to plug into their risk formula.
Yes. New York certainly set a high bar which other states are expected to follow. They have to make sure that using social data in underwriting is actually justified and logical for use and doesn't unfairly discriminate against certain customers.
Some folks that you and Leslie Sism spoke to for your story say be mindful of who's looking at your social media posts and be careful what you put on display potentially for the insurance world to see.
Even though it's not happening right now, experts in this field expect that it's just a matter of time before it will. And so if you're consistently posting yourself doing dangerous, risky behavior, that could come into play potentially years from now when combing social media for insurance risks is more widespread.
So if you're taking time off for work and all of a sudden you're posting, great trip to Vermont skiing, you know, hey, wish you were here, then that can set off red flags.
Well, that already is setting off red flags on the claim side. So when you are filing claims for auto insurance or property insurance, disability, already in practice is combing social media posts for any clues that might contradict what you've said in a statement.
So this is actually going on as we speak, and it's being done mainly to confirm statements made by customers who are filing claims. But in terms of something more widespread by the insurance companies, as of right now, that could be a very time-consuming process.
Yes. So the experts that Leslie Sism and I spoke with for the story, we learned that using social media in underwriting and figuring out how much you need to pay for, let's say, life insurance policy, That is still in development. It's not widespread. It's not used to scale because the technology isn't quite there. But there is agreement that it's simply a matter of time before this becomes a more efficient process for an insurer to gauge your risk.
You know, this seems like kind of a gotcha topic, but this could actually work to benefit consumers in some ways.
Yes, there are ways that potentially your premiums could go down. If you are a healthy person and your social media lifestyle matches that, you potentially could see lower premiums.
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