What is Personal Cyber Insurance and Do You Need It?

Personal Cyber Insurance Coverage for Homeowners and Renters

There’s little doubt the enormous role that technology plays in our everyday lives. From Smart phones to programmable thermostats, laptops, iPad, and virtual assistants like Amazon’s Alexa, our lives and homes are more connected than ever. Personal Cyber Insurance added onto your existing home or renters insurance policy can provide peace of mind that you are covered if you fall victim to cyber crime.

Personal Cyber Insurance can protect your home network from cyber crime

Our Homes Are “Connected”

Do you have any of the following:

  • a banking app on your phone,
  • an online account for your doctor’s office or health insurance that you access from your laptop, or
  • an online account to manage your 401K and other investment accounts on your iPad?

A recent report by Bankrate found that, “63% of smartphone users have at least one financial app” on their smartphone. * In addition, our homes are now equipped with virtual assistants like Alexa, Siri and Google Home. We use apps to operate everything from TVs to light bulbs and thermostats. MarketWatch reports that, “the number of smart homes in North America is expected to hit 73 million by 2021, making up more than 50% of all households.”**

The Risks of Connectivity

While more technology brings added convenience into our lives, the rise of tech is not without risk. As more technology is integrated into our lives, the odds of our personal data being compromised also increases. Each connected device allows opportunities for hackers and cyber criminals to steal personal information, commit fraud, or even extort money.

Each day the news reports on the latest corporation to fall victim to a data breach or cyber-attack. Many people don’t realize that individuals face many of the same risks as businesses, including:

  • virus and malware attacks
  • data breach
  • fraud

Consider the following scenario:

A senior citizen receives an email from her granddaughter, who is currently traveling with her roommate. The granddaughter says she caused a car accident and needs money for a lawyer. The granddaughter is afraid to tell her parents or ask them for the money. The grandmother then receives another email from her granddaughter’s lawyer which includes, a copy of the accident report and details the injuries of the victim. The victim will accept $6,000 for his medical expenses and will sign a release, dropping all charges upon receipt of the money. The grandmother wire transfers the money as instructed, only to call her granddaughter and discover the story was untrue, and she had been a victim of fraud.

Personal Cyber Insurance can protect against cyber crime

More frequently cyber criminals are going after individual homeowners and renters, as they are easier targets than businesses with more sophisticated security measures. In fact, the White House Council of Economic Advisers recently reported that, “the FBI’s Internet Crime Complaint Center received almost 300,000 individual complaints of cyber crimes, with a total estimated cost of $1.3 billion in 2016.That comes out to an average cost of over $4,000 per cyber crime.”***

What is Home Cyber Protection Insurance and What Does it Protect Against?

Home Cyber Protection Insurance also referred to as a Personal Cyber Insurance policy is offered as an endorsement to a homeowners insurance or renters insurance policy.

Personal Cyber Protection

                  Source: Safety Insurance “Home Cyber Protection Coverage”

 

Some companies also offer cyber bullying protection as part of a Home Cyber Protection policy. The cyber coverage provided varies depending on the insurance carrier but most personal cyber policies include:

  • Coverage to restore systems and recover data that has been lost or damaged due to a cyber-attack, including attacks from malware, unauthorized use of computers, mobile devices and connected smart home devices.
  • Payments for responding to cyber extortion demands based on a threat to damage, disable, or disseminate information from devices or computer systems.
  • Payments for services to notify affected individuals, whose private personal data is breached.
  • Protection for online fraud resulting in a direct financial loss to a covered policyholder.

Is Home Cyber Protection Coverage Affordable?

Many insurance companies offer some form of Personal Cyber Protection, as an endorsement that can be added onto a homeowners or renters insurance policy.  Cyber Protection Coverage is surprisingly affordable.

Safety Insurance’s Personal Cyber Insurance endorsement covers $25,000 in cyber damages for only $36 annually. Similarly, Home Cyber Protection offered by Arbella Insurance covers $25,000 in cyber damages for only $42 annually or $50,000 worth of coverage for $52 per year.

With our homes increasingly “connected” by smart technology, we’re more vulnerable than ever to cyber-attacks. A hacker stealing your private, personal information can result in significant financial, emotional and reputational harm.

Steps You Can Take to Help Protect Your Data

It’s important to take steps to protect yourself and your information in today’s connected world.

  1. Always be careful with any personal information you provide onlin,e and make sure that the site you are providing them to is reputable and secure.
  2. Always use strong passwords and consider installing a password manager. A password manager will encrypt your information automatically and change your password each time you accept a site.
  3. Purchase a Personal Home Cyber Insurance Policy. Personal cyber crime is not something that can be prevented. A personal cyber policy will protect you If you fall victim to identity theft by paying any direct monetary losses relating to the cyber crime.

McSweeney & Ricci Insurance provides complete insurance protection for your home, car and business, as well as advice that results from over fifty-five years of experience.

If you would like more information on adding a Personal Home Cyber Insurance Policy to your existing home insurance or renters insurance policy, contact one of our experienced Account Managers by calling (844) 501-1359 or click here to request a complimentary quote.

 

Sources:
*Bankrate.com 02/08/18 “63% of smartphone users have at least one financial app”
**Marketwatch.com 07/07/18 “7 Ways to keep your smart home from being hacked” by Kari Paul
***ValuePenquin.com “What is personal cyber insurance? And How Can Homeowners Buy a Policy?” 03/05/19 by Mark Fitzpatrick

 

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