Can Social Media Hurt Your Insurance Application?

Social media is great for businesses, but can it hurt your insurance application? You can market to a broad audience through your posts as well as online reviews by past customers. Personally, I love reaching out to local Facebook pages to get recommendations for bakeries, hair dressers, dog groomers, etc. Just recently I ordered my son’s birthday cake based upon a recommendation someone made on Facebook, spoke with the owner on Facebook Messenger, and purchased the cake via PayPal. Voila! Cake ordered and problem solved.

But have you ever considered that social media could potentially hurt your insurability or affect the rating carriers may use to provide you with a quote for your business insurance or perhaps even your personal insurance? This is an issue we run into all the time in the world of insurance. We gather information from prospective clients, submit the insurance applications to our markets to obtain quotes, and then are contacted by the underwriter to probe on information that was found on our client’s Facebook page or other social media platforms.

For example, a client puts on their insurance application that they are an auto repair shop that only deals in minor repairs, but their Facebook page clearly offers welding services. Or, a business owner tells me they are the only driver of their commercial vehicle, but we later find a post by an employee mentioning she just made a delivery to a happy client, clearly showing she was driving the company car. Both of these scenarios can be perceived as lying to the insurance company, potentially jeopardizing your coverage should a claim occur or causing the carrier to non-renew your policy.

Frequent mistruths underwriters often discover from insureds trying to keep premiums low vary whether you are applying for commercial insurance or personal insurance. This article from Investopedia shares some common ones.

I cannot stress enough that carriers and underwriters are using social media for underwriting purposes on a daily basis now, as it provides them with helpful information. It is important to be honest on your insurance application and with your agent about your true business exposure. If your little white lies are discovered, there can be expensive consequences. See this article.

If you are offering services on your social media, you need to make sure to include them on the insurance application you submit or mention them to your agent during the fact-finding process.