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Beware: Insurance companies are watching you on Facebook, Twitter

For the past several years, we’ve been reading countless stories about employees being fired or job seekers not getting hired because of controversial material they’ve posted on their Facebook or Twitter accounts.

Now, social media mistakes may cost you when it’s time to process your insurance claim.

The Los Angeles Times recently reported on the trend of insurance companies turning to social media to snoop on would-be fraudsters.

insurance social media

The Times profiled a 30-year-old Canadian woman who received disability benefits after she was forced to take a leave of absence from her job as an IBM technician. A year later, those benefits stopped. The insurer, Manulife Financial Corp., told the woman that Manulife stopped paying her benefits after one of its investigators saw photos that the woman posted on Facebook -- photos that showed her hanging out at a beach and a bar.

Moral of the story: Remove Facebook posts about you completing a marathon if you're in a dispute with an insurance company over a bodily injury claim.

Insurance fraud organizations such as the National Insurance Crime Bureau estimate that nearly 10 percent of all property and casualty insurance claims are fraudulent. These claims cut into the profits of insurance companies and force everyone to pay higher premiums.

Insurance companies are just beginning to use social media as a weapon against insurance fraud, says Jim Quiggle, a spokesman for the Coalition Against Insurance Fraud.

“Sometimes, claimants leave tell-tale evidence on YouTube or Facebook – they get sloppy, let their guard down and brag about finishing a marathon or going rock climbing,” Quiggle says. “Insurance companies are just starting to understand that trolling social media websites can produce a lot of useful evidence that can help them either verify or deny a claim.”

Quiggle says this new trend will spark debate about privacy issues -- and will lead to lawsuits lodged by consumers against insurance companies and social media outlets.

“What is the expectation that a consumer has of privacy? The information one has on Facebook is only meant for a limited number of friends,” Quiggle says. “This will be a legal tabula rasa, because there are so few precedents that conclusively guide insurance companies regarding fraud investigations and the use of social media.”

Insurance fraudsters invading Oklahoma?

Recently, new Oklahoma Insurance Commissioner John Doak said he was laying off six of the nine investigators in his anti-fraud unit. The move was made, in part, because the Department of Insurance discovered that of its 142 open cases, 120 involved challenges by insurance companies against policyholders.

“The companies need to handle their own claims,” Randy Brogdon, deputy insurance commissioner, told The Oklahoman.

One of the investigators who got laid off thinks Oklahoma soon could become a haven for would-be fraudsters. “If I were going to commit insurance fraud in Oklahoma, I would feel pretty confident I could get by with it,” the laid-off investigator anonymously told The Oklahoman.

Setting a poor example

The mayor of a New Jersey city has been indicted on charges of insurance fraud and leaving the scene of an accident.

Garrett Smith, who was elected mayor of Roselle, N.J., in 2003, has been accused of crashing into a parked car on Christmas Day 2010, then driving home – leaving a trail of automotive fluid that police tracked to his garage door, according to the Newark Star-Ledger. Roselle is southwest of New York City.

The next day, Smith moved his car from his garage to the street during a blizzard, then told police and his auto insurance company that a snowplow driver wrecked his car. On Jan. 26, 2011, Smith was indicted on one count of insurance fraud and two counts of filing a false police report. Smith will fight the charges, his attorney, Thomas Ashley, told the Star-Ledger.

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