Personal Cyber Insurance: What Does It Protect You From?

We have heard about increasing cyber-crime and cyber-attacks in today's connected world but do you know about what risks you face online as an individual, or whether your home insurance covers you if you are a victim of internet or cyber-crime? The more connected we become, the more people worry (or don’t worry enough) about cyber-crime.

What if someone gained access to your smart home, the personal information on your computer, phone or even your wearable? Who could help you?

More criminals are accessing data and personal information and demanding money or threatening to sell the information.

According to the October 2018, Consumer Cyber Insurance and Security Spotlight Survey:

63 percent of Americans have at least one connected device at home. A third have connected smart home devices like thermostats; or wearables like personal fitness trackers. 25 percent of these have connected security cameras, door locks or appliances.

Most of us are connected in one way or another, personal cyber insurance can help if you become a victim of cyber-crime.

What is Personal Cyber Crime Insurance?

Personal cyber-crime insurance is an emerging insurance product for individuals that helps compensate you and members of your household for losses resulting from certain cyber-attacks or if you are a victim of cyber-crime. It also may provide assistance in recovering from a cyber-attack.

Cyber Crime Insurance may also be referred to as:

  • Personal Cyberrisk Insurance
  • Internet Crime Insurance
  • Personal Cyber Insurance
  • Cyber Protection Insurance

Insurance Made Simple

As consumers, we tend to focus on the price of the insurance, but there are ways to balance price with value if you can understand the basics behind your home & auto insurance policy.

What Does Personal Cyber Crime Insurance Cover?

Every cyber-crime policy or coverage may be different. To understand cyber insurance coverage, always ask what the coverage or risks covered are, and what the conditions and exclusions are. There is no real standard for how insurance companies are covering internet crime right now, so it is important to ask.

7 Things Cyber Insurance May Cover

Here is a list of some cyber-crimes that are covered on some of the cyber insurance products available today. A policy may offer only a few of these coverages or all of them. You can use this list to ask questions and understand your options when shopping for personal cyber risk coverage.

  1. Ransomware and Cyber Extortion
  2. Malware
  3. Help dealing with phishing scams
  4. Help dealing with identity theft
  5. Loss of money due to a cyber-attack that has compromised one of your accounts
  6. Assistance if a cyber-attack is preventing you from accessing your home, files or information; some policies also include related data restoration
  7. Cyber bullying or internet stalking

Internet or Cyber Crime Insurance may be available as:

  • Stand-alone cybersecurity coverage (usually for businesses)
  • Coverage provided as part of package policies, such as in a high-value home policy

Does Home Insurance Cover Internet or Cyber Crime?

Not all home insurance covers cyber-crime, in fact, according to the Insurance Information Institute, more than 4 out of 5 people with connected devices either lack coverage or don't know if they are covered.

A big part of this is because the type of coverage you may or may not have varies by insurance company, there is no "standard offering" in home insurance and there are companies that don't cover it at all.

For standard home insurance companies, cyber risk and cyber-crime coverages are not usually included, but the concept is becoming more popular, so more insurance companies may start to offer the coverage as an endorsement to your policy.

To know if you are covered, ask your insurance company what is included in your policy. If you do not have coverage, ask if they have a product or endorsement to cover you.

Use the list above, 7 Things Cyber Insurance May Cover, to ask your insurance company what's covered, or use it as a checklist when you are shopping for cyber coverage as part of a home insurance policy.

Who Needs Cyber Protection Insurance?

Tech is a growing part of our daily lives. Anyone connected to the internet or using connected devices should consider cyber insurance. The increasing ways we connect online open us up to cyber-crime on many levels.

Is Identity Theft Insurance and Cyber Crime Insurance the Same Thing?

No, Identity theft is a type of cyber-crime but it is not the only kind of cyber-crime, there are many forms of computer crime. Identity theft coverage is very specific and is often included in insurance offerings, but none of the other items in our list are normally included in an identity theft protection.

Top States with Cyber Crime Statistics

If you wonder if cyber-crime is really an issue, here is some information on how much cyber-crime is being reported across the country, from the Internet Crime Complaint Center's (IC3/FBI) stats on cyber-crime incidents.

  • California 41,974 incidents in 2017
  • Florida 21,887 incidents in 2017
  • Texas 21,852 incidents in 2017
  • New York 17,622 incidents in 2017
  • Pennsylvania 11,348 incidents in 2017
  • Virginia 9,436 incidents in 2017
  • Illinois 9,381 incidents in 2017
  • Ohio 8,157 incidents in 2017
  • Colorado 7,909 incidents in 2017
  • New Jersey 7,657 incidents in 2017

How Much Does Personal Cyber Insurance Cost?

The cost of cyber insurance for individuals varies depending on what is covered and how you get it. In some cases, it comes for free with certain home insurance policies like Burns and Wilcox high-value home insurance, for example.  Chubb Insurance and AIG are two other high-value home insurers who currently offer comprehensive cyber protection insurance coverage.  Other companies, like Travelers, have substantial Identity Fraud Reimbursement coverage.  According to AON's Cyber Market Update Report, 170 insurers in the United States reported writing cyber insurance in 2017 (this includes business products) and although coverage is not as readily available now through all insurers, the number of insurers offering it for individuals is likely to grow as this type of crime continues to evolve and leaves both businesses and people at risk and needing protection.

The Balance                                                                                                                                                                                                                                                                                                                                                                                                                                                                  #DIA

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