At first glance, what you say on Facebook should have nothing to do with your insurance policies or your rates.   But the answer is more convoluted than that.  Your FB actions can have an effect on your insurance rates and coverages in some circumstances.

Let me start by saying as of right now, I am unaware of any insurance company using Facebook as an underwriting tool for personal insurance policies like home insurance and auto insurance.  Still, I believe that it’s possible that someday this may no longer be the case.    With commercial insurance, the picture is very different.  Businesses want very much to attract people to their FB pages and commercial insurance underwriters will routinely study a business Facebook page to be sure that they are comfortable insuring that enterprise.  So what are some of the things you should and shouldn’t do or share on your personal Facebook page?

Start by understanding that Facebook is rich source of informational detail for crooks and thieves out there.  I know, I know, one bad apple always spoils the fun.  But you can still have a great time and just not give up the information so easily.  The thieves are out there looking for the easy targets.  So here are some strategies to keep you from becoming the low hanging fruit for the crooks out there. 

First of all, use a very strong password.  You really don’t want someone guessing your password based on the information that they can see publicly on your profile.  In addition, while it is ok to show your birthday, don’t show the year you were born.  That is just an invitation for identity thieves to go to work on you. 

Take the time to study your privacy controls and try and limit as much as you can to just your friends.  Restrict access to photos, birth date, family information and religious views.  The more pieces of the puzzle you give out, the easier it is for someone to steal from you.  Also, be careful not to post your children’s names in photos as tags.  If someone else does this, you should ask them to delete the tag. 

This next reminder should be obvious but people break this rule all of the time.  Don’t post the dates you will be out of town.  If you must share the pics from your recent trip, just wait until you get home to share them.  If you are talking about a future trip online, be as vague as possible about the actual dates you will be gone.

Last of all, remember that your young children are perhaps the weakest firewall out there.  Go over this information with them and if possible, monitor what they say and do on Facebook.  I know this stuff is just common sense but I see people ignoring these issues every day.

Right now, what you say and do on your personal Facebook page is not a threat to your home insurance or auto insurance rates or protection as far as I can tell.   There are rumors out there, which I cannot confirm, that indicate that life insurance companies may be trying to track applicants on Facebook to see which people should get the preferred rates and which should be charged more.  However, the biggest threat to you at this time seems to be the thieves out there.  Please use good common sense when you post of Facebook.

Clinard Insurance Group is an independent insurance agency located in Winston Salem, NC.  We want to pull back the curtain on the insurance industry for all consumers.  We want you to be an informed insurance buyer.  If we can help you with your home insurance, your life insurance, your auto insurance of even your business insurance needs, please call us, toll free, at 877-687-7557.

Workers compensation insurance is unique in that there is a direct link between the rates that you pay and the losses that you have had in the past.  This process is handled with the experience modification factor, a rate modifier on your work comp policy that adjusts the price that you pay up or down.  To learn more about experience modification factors and how they are calculated, read my earlier blog here.

The NCCI (National Council on Compensation Insurance) is in charge of maintaining the experience modification factor process.  The formula that is currently in place has remained unchanged for many years.   This formula attempts to estimate what the expected losses will be for each business, based on their class codes and their payroll levels.  The formula has two main components, one that assigns a weighting to loss frequency and another to loss severity.  The loss frequency side of the equation caps the amount of all losses at $5000.   So, if your company has a $5000 loss and another loss that is $100,000, they will both carry the same weight in this half of the modification calculation.   This can mean that a company with 4 losses, all under $5000 can conceivably have a higher modification factor than a company with one $20,000 loss, although in each case each had total losses of $20,000.

The new modification calculation formula changes the $5,000 cap on the frequency side of the equation.  This cap will rise over time but by the time the phase in is complete; the cap will have been increased to $17,000.  After 2015 this cap will be indexed for inflation. 

So what will these changes mean for you?  The charts that we are seeing with estimates of recalculated mods seems to indicate that if your mod is less than 1.0, then you will probably see an even lower mod under the new formula.  The further you get below 1.0, the more change you will see on your mod.  For instance it is expected that a mod of .83 today would translate to roughly a mod of .77 in 2013.   For one at .99 today, the expected change will only be down to .98.  On the other hand, mods above 1.0 should get even larger under the new rules.  The farther away from 1.0 you get, the larger the change in the mod from the old formula to the new one.  For instance, a 1.14 mod is expected to be more like 1.18 while a 1.69 mod will translate to a 2.01 mod.  The net result here is that those with losses are going to pay more for their work comp and those that control and reduce their losses will see lower mods.

So what is the take away for you, the business owner?  Well your interest in keeping workers comp claims lower will now be even more magnified.  You have more to gain and more to lose.  You should be careful to select a workers compensation insurance company with significant loss control and return to work programs.  Workers compensation insurance in NC is a specialty line and I would advise that you take a good look at using an insurance company that writes only workers compensation insurance and nothing else.  The advantages that these companies will have in loss control and back to work support should come back to pay you dividends over the long run.

Clinard Insurance Group is an independent insurance agency handling hundreds of workers compensation policies for our clients all across North Carolina.  We understand workers compensation and we know how to save you big money on your workers compensation policy, both today and 5 years from now.  Give us a call today, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com and let us get to work for you right away, helping you carve away some of your workers compensation expenses.