Could that Instagram image of you bungy jumping in your 20s result in having to pay higher insurance costs in the future? One insurance expert thinks so.
Michael Naylor, a senior lecturer in finance and insurance at Massey University, says people should expect insurers to mine their social media accounts in the future to determine how much they will charge for insurance premiums and if they will pay out on claims.
“People have to be aware everything they do on social media can be effectively public.
“You can set privacy settings, but of course they can be hacked.”
He says New Zealand insurers are not set up to deal with social media at the moment but they will be.
“Some in the US are already doing it.”
Naylor says the cost of paying a person to do the research has made it prohibitive up until recently but apps that can identify a person from an image by using social media are making it cheaper and more likely.
He predicts it will be one to three years away in New Zealand and says it may not come from existing insurers but new entrants to the market who will use personal data to cut insurance premiums for less risky customers.
That could leave old-style insurers with more risky customers and the prospect of rising premiums to cover their costs.
He says the change could have implications for people who seek adventure when younger and record it all on their social media pages.
“Of course the internet doesn’t die.”
They may have to prove they no longer undertake those activities to get insurance in the future or sign exclusion agreements meaning they won’t be covered for certain activities, says Naylor.
Insurers are already warning home-owners to be careful about what they post on Facebook about going away on holiday because it could be in breach of their duty of care policy provisions for house and contents insurance.
Vero, one of the country’s largest insurers recently posted a blog, giving people tips on how to avoid making this social media faux par.
Jimmy Higgins, Vero’s head of claims says it is not telling people to stop posting their holiday snaps online but to be careful about revealing too much detail and casting that information too widely.
We are not saying don’t show those family photos of you on holiday – it is just one of those things to be cautious of.
It might not be your Facebook friends that act on the information but a friend of a friend, he warns.
Higgins says people can protect themselves by not being specific about the dates they are away and making sure they don’t identify where they live.
By Tamsyn Parker
See full story at m.nzherald.co.nz