In an article titled “6 Things You Should Never Reveal on Facebook,” Kathy Kristof of CBS MoneyWatch.com writes about how insurers are starting to use information posted on social networking sites to determine whom to cover and how much to charge.
“The folks at Insure.com also say that ill-advised Facebook postings increasingly can get your insurance cancelled or cause you to pay dramatically more for everything from auto to life insurance coverage.
“You take your classic Camaro out for street racing, soar above the hills in a hang glider, or smoke like a chimney? Insurers are increasingly turning to the web to figure out whether their applicants and customers are putting their lives or property at risk, according to Insure.com.”
First, do these insurance company reps really believe that everyone tells nothing but the truth in their tweets and posts? That’s like believing what you read in personals ads, and I’m here to tell you that every single man on the planet isn’t kind, honest and addicted to sunsets and cuddling. Wise up, guys!
Second, I wonder how long it will be before all of us involved with horses, doing things insurers are surely going to classify as a potentially (profitably) dangerous, will be paying higher health and life insurance premiums than the average couch potato. And, of course, some riding disciplines will no doubt be considered even more dangerous. (All you folks who jump better start saving now to pay your extra premiums.)
I don’t know why I found this information shocking. I had a similar experience recently when I was exploring changing carriers for my professional liability insurance. In fact, all my fellow equine professionals who purchase liability insurance to cover their lesson and training activities will probably encounter this sometime soon.
In my case, even after I had filled out a rather detailed application form, the underwriting department at the new company I was considering actually based some of the decision about whether to cover me and how much risk I posed (therefore, how much premium I should pay) on information gleaned from my website.
Yep, all those prying financial questions on the application form, and the inevitable affirmation of truth and accuracy that precedes your signature, don’t give them enough information. So, they comb through your online marketing materials, assuming their interpretation of your promotional copy will give them a more accurate risk assessment. (I’d say “justify charging a larger premium,” but that’s just my interpretation.)
How preposterous is it to think that marketing information, by definition intended to sell your organization and services to potential clients, in any way represents a concrete, objective picture of your company? That makes no sense at all, unless your promotional copy reads like a resume or a statistical analysis. “In 2008, XYZ Riding Centre provided 635 riding lessons to 85 clients with a reported success rate of 93 percent.” I don’t think so!
The point of marketing is to be subjective, to puff up and overstate and exaggerate and generally paint a rosy picture. The degree to which those things are done differs depending on the personality of the person whose services are being sold. Some of the training gurus come on with all the subtlety of used-car salesmen, while others take a less flamboyant approach. (Someone recently referred to my web bio as “humble.”)
In my case, the fact that I include on my site biographical information about a frequent collaborator, who has her own business entity and her own insurance, initially increased the rate I was quoted. Of course I had merely neglected to include her on my application form as an employee who also needed to be covered, right? And I then I mistakenly avowed that the information I provided was correct by signing the form, all the while leaving off this employee that an underwriter discovered listed on my website?
Luckily, the agent I was working with realized all this and was able to clarify for the underwriters. No, I did not forget to include an employee on my application. No, I do not need coverage for someone who is not part of my organization. And no, I was not making a fraudulent statement when I signed the form. If the person was an employee and I was responsible for insuring her, I would have indicated such on the form in the space provided.
On my website, I never, ever state in any way that this person is my employee; in fact her own business name appears prominently and there is a link to her very own website. So, clearly whomever was doing the gleaning in this case didn’t do a very good job of accurately determining actual risk. And that person’s mistake could have cost me money.
This type of practice seems inherently inefficient and practically guarantees mistakes, making it seem to me to be a bad idea notwithstanding the privacy issues. If the insurers don’t believe an applicant has provided truthful information on my application form, either turn the person down or ask for clarification. If the underwriters need to know something that wasn’t covered on the form, don’t pretend they can read between the lines of advertising copy or a social networking page and come up with concrete information.
In short, do not just pick a number out the air (or cyberspace) and expect me to pay a premium that in no way reflects the risk exposure I represent.
A big thanks to Tami George – dressage rider extraordinaire and honest, sensible insurance professional – for educating me about some of the nuances, such as the actuarial difference between an “instructor” and a “trainer.” (Be sure to ask your insurer for that company’s interpretation; you might be surprised which is considered to present a higher risk.) Her company’s quote didn’t make any sense whatsoever (they expected me to pay a higher premium for “activities” they didn’t cover)?! Even though she didn’t earn my business, I do very much appreciate the time she took to educate me a bit about her industry.
So, folks, if you’re in the market for personal insurance of any kind, you might just want to consider taking all those lovely pictures of you with your horse off any publicly available site. (And be sure to get your friends to stop “tagging” you in their photos.) Maybe you should replace your horse photos with nice shots of you doing some safe activity, like sitting quietly in a sturdy chair writing checks to insurance companies.
As for us equine professionals … I’m not sure how we’re going to promote our businesses without fueling the flames of rising premiums. But get ready, your words and images and even things you don’t say or do will be used to attempt to extract your hard-earned income and enrich the insurance companies.
Read more here: “Look who’s lurking around your Facebook page: Your insurance company!“