What Is Personal Cybercrime Insurance? Do You Need It? How Can You Buy It?

According to the Federal Bureau of Investigation Internet Crime Report, there was a record number 180,000 complaints made by the public in 2023 resulting in an estimated $12.5 billion in losses. This resulted in a year-over-year increase of 10% for complaints and 22% for monetary loss, respectively.

These attacks now come from an almost unlimited series of devices. It’s not just computers or cell phones you have to worry about; your children’s home gaming systems, your smart home devices, etc. Cyber criminals can use public Wi-Fi networks and dozens of other entry points.

The first line of defense against cyber-attacks is using good online security protocols including the following:

• Use strong passwords.
• Do not open attachments unless you were expecting the files or documents.
• Do not click links in unsolicited text messages.
• Never respond to phishing attempts asking you to take immediate action by verifying, updating, or checking any account information.

If you are a victim of a crime, there could be serious financial consequences when dealing with a stolen identity including extortion demands, legal fees for lawsuits, and fixing your credit. Personal cyber insurance can help ease some burdens and costs.

Personal cyber insurance is also called internet crime insurance or cyber protection insurance, and it’s often sold as an add-on to your homeowners’ policy. Each policy is a little different. Check with your insurance company to find out what is covered under your homeowners’ policy.

• Cyber extortion or ransomware - This helps recover from cyber-attacks blocking access to your personal data without paying a ransom fee. It helps pay for the expert assistance to gain back control of your files.
• Cyber bullying or Internet stalking - If someone is harassing you or one of your family members online, this could result in school discipline, lost wages, wrongful termination, and legal expenses. Cyber insurance can pay for the monitoring of social media accounts, counseling, temporary relocation expenses as well as legal expenses.
• Online fraud covers financial losses due to illegal credit card usage, check forgery, unauthorized banking transfers, phishing schemes, and other types of fraud. Identity theft insurance is sometimes part of this coverage. Check with your insurance company for coverage or if they require it as a separate rider.
• Deceptive transfers – Also known as grandparent fraud. Scammers are trying to trick you into sending money making you believe you are helping a family member in trouble. If you fall victim to this scheme, your insurance may reimburse the lost funds.
• Data breach coverage can help if someone steals personal data and publishes it online or posts false information about you. For example, your insurance may help pay legal fees, an IT review, and lost wages as well as pay services for additional family members affected by the data breach.

Review your homeowner’s policy coverage for internet crimes or cybercrimes. Standard homeowner’s policies may not include this coverage and may not cover these types of losses. Coverage limits and costs vary widely between insurance companies and every situation is unique. Ask your insurance professional what coverage is right for you. If you are a victim of a cybercrime, you can file a claim with your insurer to help pay for your expenses. They will evaluate it and, if covered, send a check for your covered loss (minus the deductible on your policy). No one enjoys becoming a victim in any of these scenarios. But with the proper coverage, you can at least get assistance with cleaning up the mess. Stay safe out there!

Source:

2023_IC3Report.pdf

Disclosures: 

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