Insurance is ever-evolving to tackle new, serious threats to homeowners, drivers, businesses, and families alike. One threat that’s starting to rear its ugly head more and more, although not new, is cybercrime. While cybercrime is mostly a threat to businesses and organizations, households and families have been known to fall victim to this unique threat.
How do we protect ourselves? Is it necessary to buy cyber insurance for your household?
Cybersecurity is becoming a serious issue in the U.S.
Malicious attacks aren’t specific to large businesses, or even just businesses alone; criminals sometimes target households due to their typically insecure security or exploit unattended vulnerabilities in personal networks, stealing financial data, personal information, and more to use for ransom.
In just 2023 alone, phishing attacks in the United States increased by 1,265%! This was attributed primarily to the growth of generative AI and may continue to scale as an issue as more and more AI tools begin to roll out on the market. Here are some of the more common methods used by cybercriminals to exploit both technologies and human behavior:
- Phishing: Perhaps one of the most common means of cyberattack, phishing involves sending deceptive emails, text messages, or social media messages that appear to be from reputable sources, aiming to trick individuals into providing sensitive information such as passwords, credit card details, or personal identification.
- Malware: Malicious software, including viruses, worms, Trojans, and ransomware, can infect devices and compromise data security. Malware is often distributed through malicious links, email attachments, or compromised websites.
- Unsecure Networks: Hackers may exploit vulnerabilities in unsecured Wi-Fi networks to intercept sensitive information transmitted over the network. This can include login credentials, financial transactions, or personal communications.
- Identity Theft: Criminals steal personal information, such as social security numbers, bank account details, or passwords, to impersonate individuals or commit fraud. This information can be obtained through data breaches, phishing, or social engineering attacks.
- Fake Software Updates: Cybercriminals may distribute fake software updates or applications containing malware, exploiting individuals’ trust in legitimate software vendors to infect their devices.
- Remote Access Tools: Cybercriminals may gain unauthorized access to individuals’ devices using remote access tools or malware, enabling them to monitor activities, steal data, or deploy additional malicious software.
Does my home insurance protect me against cybercrime?
Some home and renter insurance policies automatically include a certain level of coverage against identity theft, or at least offer a special endorsement for identity theft. However, cyber insurance is a relatively new offering, and not all home insurance companies sell it.
For those that do, personal cyber insurance is typically designed to cover the following:
- Cyber extortion coverage, providing you the necessary funds you require to recover from ransomware attacks that could bar your information behind a paywall. You could also receive reimbursement for hiring assistants who can help you regain your data.
- Cyberbullying coverage, which can help compensate you for online harassment potentially resulting in discipline from school, wrongful termination, relocation expenses, lost wages, legal expenses, etc.
- Data breach coverage, which helps pay for the cost of hiring services if any data entrusted to you is lost, stolen, or even leaked.
You may also receive access to services for lawsuit protection, cyber monitoring, fraud investigation, electronic data repair, etc., with personal cyber insurance.
How does personal or household cyber insurance work?
Personal cyber insurance, also called cyber liability insurance or even cyber risk insurance, is designed to provide household members with a layer of financial protection in the event of a cyberattack or digital loss. Every personal cyber policy varies in what it covers, so be sure to work with your provider or agent to ensure you have the protection you need.
Coverage activates in the event of a triggered loss, at which point your insurance policy may provide you with financial compensation for losses incurred. This could be reimbursement for funds stolen via online fraud, providing funds to pay a ransom demand, or covering the costs to restore personal data.
Personal cyber insurance also often comes with legal assistance and/or the coverage of legal expenses incurred as a result of cyber-related incidents.
Do I need personal cyber insurance?
Whether you’re managing sensitive financial information, conducting online transactions, or simply using social media (like most of us do!), the prevalence of cyber threats in today’s digital landscape makes it at least strongly recommended that most households consider purchasing cyber insurance.
Personal cyber insurance offers peace of mind by providing financial protection against these potential threats, covering expenses such as legal fees, identity restoration, and financial losses. By investing in personal cyber insurance, you can protect yourself and your household against the potential consequences of cyber incidents.
Considering cyber insurance?
Give us a call. While cyber is still a mostly unknown risk, it’s important to be proactive and take the necessary measures we need to defend our personal data. Cyber insurance can provide an extra layer of security that we wouldn’t otherwise have, granting us peace-of-mind when using technology. As cyber risks evolve, so does insurance! Give one of our agents a call to discuss cyber insurance, its benefits, and whether it might be time to consider adding it to your home or renters insurance policy.
