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Big Insurance is Watching You …

We surrender our rights to a certain amount of privacy when we take to the internet, and particularly social media, because it 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 post on social media immediately moves into the public domain and finding your information becomes fair game.

Imagine what insurance companies could do with all that information? Luckily for us, in South Africa we have laws.

Insurance Facts vs. Myth

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.

As an example, let’s say your son, who had been driving drunk and wrapped your BMW around a tree, posted about it on Facebook. You then file a claim and tell the insurer some story about you driving on a slippery road, blah blah blah. The insurer investigates your claim and happens to find 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 sky rocket for everybody else. In a sense, these measures are protecting honest people, as well as the insurer.

How Insurance Companies Gather Information

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 also not allowed to sneak around or gather information in underhanded ways, such as hacking, wire-tapping, etc. But they do have a number of avenues they may utilize to collect information.

Their primary source is that which you provide them with on your application or proposal form, over recorded telephone discussions, when you first take out 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 already provided.

Insurance companies, of course, don’t 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: 

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. 

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, 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. 

Insurance Companies Share Information

The South African Insurance Association has created a database designed to combat fraud, it’s called the Insurance Data System (IDS) for short-term insurers. This gives insurers access to your claims history over the past seven years across the board, and would therefore also reveal any trends which may have emerged.

Are They Allowed To Do This?

Most insurance policies 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 the 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 alarm system, and you’re then 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 sharing of information, and be 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. Remember: every time you sign up, log in or click ‘I Agree’ – you’re relinquishing your right to complete privacy.

* This article is provided for informational purposes only and should not be construed as legal or financial advice. 

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