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Are smartphone 'pings' being used against policyholders?

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Not that long ago, the two most important items to remember before leaving the house were your keys and your wallet. Today, that list includes the relevant, must-have, smartphone. 

Technology is important for everyday tasks from personal communications, to streamlining and accomplishing professional tasks. However, recent reports indicate that these ubiquitous devices are now playing an increasing -- and questionable -- role in the denial of insurance claims. 

Specifically, these reports indicate that insurers are increasingly using cellphone tower data when analyzing claims in an attempt to pinpoint policyholders' locations. More often than not, however, this data is being used as a basis to refute their stories that they were at a specific location at the time of the underlying accident and, by extension, deny their claims for damages.

While this might seem like a fair practice in our modern digital era, many technical experts have called it into question, indicating that contrary to the arguments by insurers that smartphones are typically only 0-4 miles away when they "ping" or connect to towers, they can actually be up to 20-plus miles away.

That's because the calls made and received by smartphones aren't automatically connected to the nearest cell tower, they argue, but rather can be routed to any number of towers based on a host of factors from cost-effectiveness to signal strength.

As if this wasn't alarming enough, reports also show that prosecutors in some states are now using this dubious data to pursue insurance fraud charges.

By way of illustration, consider the case of an Iowa woman whose home burned down while she was 17 miles away camping with family and friends.

Here, the insurer denied her claim based on the so-called discovery by the investigator that cell tower data showed her smartphone being within a range of 5-12 miles at the time the blaze was reported, meaning she could have theoretically left the campsite, started the fire, and returned.

In addition to the denied homeowner's claim, she was eventually charged with both arson and insurance fraud, only to be acquitted after debunking the insurer's analysis of the data. She has since filed a bad faith lawsuit against the insurer.

"It's ridiculous what happened," she later said of the incident. "You're innocent until proven guilty. I've never felt like I was treated like I was innocent. As far as the insurance company was concerned, I was guilty."

Source: ABC News, "Insurers deny claims based on questionable cell tower data," Dave Collins, March 29, 2016

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