We’ve all heard the warnings about sharing personal information and read the criticism of Facebook’s blatant disregard for personal privacy in the name of ad revenue. Now, it appears, that the use of social media sites like Facebook and Twitter may hit us directly in the pocket book.
Insurance companies in the UK are making noise about increasing home insurance rates for those who use social media.
According to the operators of a UK price insurance comparison website, confused.com, users of social media sites could could face home insurance hikes as high as 10 percent.
In a recent article in Thompson’s World Insurance News, they cite recent burglaries in the US where the culprits used references to vacations and the use of location-based services on Facebook and Twitter to target homes for burglary.
The article also said that criminals are also using tools like Google Earth to plan burglaries from the comfort of their homes, or the local Starbucks.
I can see the logic from an actuary’s point of view, if I use these services I am more likely to share information that will lead to a burglary than someone who doesn’t. But with the proliferation of sites like Facebook and Twitter, it seems unlikely that insurance companies will be able to target those who use the services because … who doesn’t, or won’t in a couple of years? What it may mean is higher rates across the board, and more so in areas with greater internet penetration.
It seems to me that the real penalty should be on those who lack common sense; those who choose to share intimate details of their lives without paying attention to who can read them. But, because common sense is hard to measure in a questionnaire and insurance is based on pooling risk, it looks like we will all pay for the folly of the few (or the many?).