Cybercrime is an increasing threat in this computer age. Your phones, gaming systems, smart home devices, and computers are all liable to a cyber-attack.
Criminals have a lot of entry points to use to cause havoc in your life and your finances.
There are over 4,000 ransomware attacks every day in the United States since the beginning of 2016, according to the FBI.
You could face huge financial consequences such as legal fees for lawsuits, extortion demands, expenses to restore stolen identities among many others when you become a victim of cyber-crime.
For this reason, a number of insurance companies now offer personal cyber insurance to help alleviate some of these expenses.
Let’s delve into what you should know below:
What Does Personal Cyber Insurance Cover?:
This type of insurance is also known as Cyber Attack Insurance is often sold in addition to Homeowners insurance and it can cover a wide range of cyber-crimes which include:
Cyberbullying coverage: This helps to handle harassment online that leads to wrongful termination, lost wages, discipline from school, temporary relocation expenses, legal expenses, and temporary private tutoring.
Cyber-attack coverage: This pays for the deletion of a virus or reprogramming of smartphones, tablets, Wi-Fi routers, laptops, desktops, and other internet access points like security systems and smart home devices.
Cyber extortion coverage: This helps you to recover attacks that prevent you from accessing your personal data and also request a fee to regain control.
This might include assistance from technical experts who will help you regain your files and also reimbursement for any money paid if authorized by your insurer.
Online Fraud Coverage: This pays for any direct financial loss due to issues such as phishing schemes, unauthorized banking, and other types of fraud.
Data breach coverage: It helps pay for the loss of personal data or personal data entrusted to you. Assuming you have the logins of all the employers of the company on a tablet with you and the tablet gets stolen, the coverage would pay the individuals who were affected by the breach.
Personal cyber insurance might include services such as:
- Lawsuit protection: This covers you for allegations of unintentional invasion of privacy, slander, or online libel.
- Access to fraud specialist: This gives you access to specialists who can help through the resolution and recovery process.
- Active Cyber monitoring: This helps to limit or prevent cyber loss.
- Replacing or repairing electronic data
- Replacing or recreating, retrieving personal identification documents or financial documents.
How Does Personal Cyber Insurance Work?:
You can file a claim if you are a victim of a cyberattack to help pay for your expenses such as legal fees and direct financial loss covered by the policy.
The policy will always have a coverage limit and deductible.
The FBI recommends not paying the ransom as it doesn’t warrant the release of a decryption key and also in most cases the criminals would most likely demand more money after the first ransom is paid.
You need authorization from your insurer before you pay any ransom as some insurance companies might approve payment for extortion cases.
How Do I Get Personal Cyber Insurance?:
If you already have a homeowners’ insurance policy, the insurer might add personal cyber insurance as optional coverage.
Some insurance companies offer personal cyber insurance for high-value homes policies only.
Who Sells Personal Cyber Insurance?:
Acuity Identity Theft and Cyber Protection:
Acuity homeowners, renters, and condo policyholders can opt for Identity Theft and Cyber Protection coverage.
This covers issues such as credit card fraud, data recovery, system restoration, identity theft, and cyber extortion.
AIG Family CyberEdge:
Homeowners insurance policyholders with AIG can add Family CyberEdge coverage as an endorsement.
This covers cyber extortion, crisis management, data restoration, and cyberbullying. The coverage can range from $50,000 to $250,000.
You can also add identity monitoring services to your policy.
Arbella Home Cyber Protection:
The Connecticut and Massachusetts policyholders can add this coverage to their homeowners’ insurance.
Arbella offers cyber-claims specialist support in addition to covering problems such as data breaches, online fraud, cyber-attacks, cyber extortion, and cyberbullying.
Chubb Masterpiece Cyber Protection:
Homeowners insurance policyholders of Chubb insurance might already have some cyber protection in their policy.
Protections such as reimbursement for fraudulent credit card charges, identity theft resolution assistance, legal assistance for unintentional online slander, and Document replacement.
Homeowners who opt for Masterpiece Cyber Protection can get additional coverage for issues such as cyber financial loss, cyber extortion, cyber breach of privacy, and cyberbullying.
The company also works with a crisis management firm that pinpoints your vulnerabilities and helps you recover your lost identity if you become a victim. They also take care of forensics and legal firms as well as public relations.
Mercury Insurance Home Cyber Protection:
Policyholders with Mercury insurance can add the Home Cyber Protection to their policies.
It includes coverage for home systems attacks, cyber extortion, online fraud, and cybercrime.
They also offer specialists access if you are a victim of cyber-related extortion.
Pure Starling Fraud and Cyber Fraud:
High-value homeowners with Pure Starling insurance get the Pure Starling Fraud and Cyber Fraud coverage as an endorsement.
It normally covers issues such as cyber extortion, systems attacks, and cyber-crimes.
Pure Starling Fraud and Cyber Fraud also includes access to cyber security experts and active cyber monitoring.
There are five levels of coverage limits, they are;
- $100,000 with a $500 deductible.
- $250,000 with $1000 deductible
- $500,000 with $1000 deductible
- $1m with a $1000 deductible
- $2m with a $2000 deductible
They also cover cryptocurrency theft due to cyber-attack.
Safety Insurance Home Cyber Protection Coverage:
This is available to policyholders in New Hampshire and Massachusetts.
It covers the loss of data on mobile devices, computers, and other connected technology such as smart home devices.
They also offer access to specialists who can respond adequately to extortion demands. The coverage limit in amounts is $25,000 or $50,000 with a $500 deductible.
State Farm Identity Restoration Insurance:
This policy is optional coverage for homeowners, farms, renters, condos, and manufactured home policyholders for an added amount of $25 per year.
Their base coverage reimburses you for all the costs incurred with identity theft and also a case manager would be assigned to you to work with your financial institutions for a year.
You can decide to add endorsements for cyber extortion coverage and cyber-attack coverage. The endorsements have an annual limit of up to $15,000.
Ask Your Insurance Company About Cyber Coverage:
You should inquire from your insurer if there is a cyber-insurance add-on for your policy. Most homeowners’ insurance policies typically cover check forgery, credit and debit card fraud, and counterfeit cash.
You can add fraud coverage to your homeowner’s policy to cater to what is not covered.
Fraud coverage covers financial losses from fraud such as identity theft.
It also covers the situation where you have suffered from financial loss after being misled. This is known as intentional and criminal deception.
Do You Need Personal Cyber Insurance?:
With antivirus software, identity theft insurance and monitoring services, you can reduce the risk of cybercrime but it is not a 100% defense method.
It will not cover your private tutoring due to cyberbullying, fraudulent credit card charges, or reimbursement if you are to pay a ransom for your personal files.
If there are fraudulent charges on your credit card bill due to online fraud, a cyber-insurance policy can help you cover some of these expenses.
How Can I Prevent Cyber Attacks?:
You can follow the steps below to help reduce the risk of a cyber-attack:
- Use two-step authentication for your logins, such as social media accounts and email.
- Never save your credit card information online
- Keep your devices and computers updated and install the latest operating system.
- Back up digital information by making copies of your data to a hard drive or a cloud service.
- Make sure you change your password every two to three months. Use a strong password that is at least 12 characters.
- The FBI recommends the following if your device is infected with ransomware
- If you can, collect and secure partial portions of the ransomed data.
- Delete registry values and files to stop the program from loading
- Change all your network and online account passwords.
- Power-off devices that have not yet been completely corrupted.
- Secure your backup data immediately by taking all of them offline.
- Isolate the affected computer and separate it from the network to prevent it from attacking other devices or computers and access points
- Contact law enforcement to report a ransomware event and ask for help.
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