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Personal Cyber Insurance – Why You Need It!

Personal Cyber Insurance
Table of Contents

Cybercriminals have several different entry points in your home that they can use to destroy your finances and personal life. They can enter through your computer, WiFi router, smart home devices, and more. So how do you prevent a cybercriminal from ultimately wreaking havoc on your life?

You get a home cyber protection insurance policy. If you fall victim to cybercrimes, you can face substantial financial consequences such as paying to restore your stolen identity or legal fees for lawsuits.

To help cover some of these risks, you can depend on a personal cyber insurance policy. This brief article will cover the basics of personal cyber insurance and who you can contact to protect your family today.

What Is Personal Cyber Insurance?

Personal cyber insurance is a type of coverage that you can add to your homeowners’ insurance policy. This policy is specifically designed to mitigate losses from a vast number of cyber-attacks, including network damage, business interruption, and data breaches.

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Cyber Attack Coverage

Cyber attack coverage helps pay for the removal of a virus on your devices or the reprogramming of your smart home devices or smartphones. Any other devices, such as your laptop, desktops, WiFi router, or tablets, can also suffer from a cyber attack.

Cyberbullying

Cyberbullying is a huge issue, especially with the advancement of technology and social media. If you or someone in your household gets wrongfully terminated or disciplined from school, this coverage will help pay for temporary relocation expenses, legal expenses, and lost wages.

Online Fraud

In the event that your identity gets stolen and there are unauthorized credit card transfers or banking transfers, you can count on your online fraud coverage to help pay for those financial losses. This coverage also includes financial coverage for any phishing schemes and other types of fraud.

Data Breach Coverage

Today, about 58% of the workforce in the United States works remotely, which leaves room for a lot of possible data breach problems. If your company’s personal data or proprietary information gets lost, published, or stolen, your data breach coverage can help pay-services to the individuals affected by the breach.

For example, let’s say you work for a school district and you’re in charge of making payments on a tablet for a football game, and someone steals the tablet. Data breach coverage would pay for those affected by the breach.

Cyber Extortion Coverage

In the event that someone takes your information and holds it hostage in exchange for ransom, you can use this coverage to receive possible reimbursement for that ransom. Your insurance company will most likely provide you with assistance in regaining your data, and if approved by your insurer, they can reimburse you for any paid ransom.

Do Homeowners Need Home Cyber-Protection?

It is very important to add this protection to your insurance policy to ensure that you have adequate coverage. This coverage can help pay for costs associated with recovering your identity in the event of identity fraud or cyber extortion.

There are several different ways a cybercriminal can hack into your devices. For example, if you purchase a gift from a scam website that you did not know was a scam, they can access the information you input.

When you set up your personal information, such as your address, phone number, and card information, they can use that information to open up a card in your name. They can also use your card information to make purchases on other websites.

Unfortunately, you won’t know that someone stole your information until maybe a few days or a few weeks later when your credit score drops or you notice an unauthorized purchase on your credit or debit card.

What’s the Difference Between Personal Cyber Insurance and Identity Theft Insurance?

Identity theft is another coverage you can add on, and it helps in the case that you are the victim of identity theft or a data breach. The main difference is that identity theft protects and restores your identity or personal information. In contrast, personal cyber insurance repairs and protects your smart home technology and your home devices.

Does My Homeowners’ Insurance Cover Cyberattacks?

Most homeowners’ insurance policies cover certain types of fraud, such as counterfeit money, unauthorized use of credit cards, and check forgery. Your policy may also have a limit for what it will cover; for example, you may only have coverage up to $500 for any unauthorized credit card use after a cyberattack. Your homeowners’ policy won’t cover cyberattack-related expenses such as legal fees, data recovery costs, or relocation due to cyberbullying.

Does Personal Cyber Insurance Cover My Stolen Laptop?

Personal cyber insurance protects you and helps you recover from certain cyberattacks such as data breaches, cyberbullying, cyber extortion, and online fraud. If someone steals your laptop, your homeowners’ insurance may cover for that up to a specific limit. For example, you may only have coverage for that up to around $750. Your policy may also cover any lost data, depending on who your homeowners’ insurer is.

Purchasing Cyber Insurance

Not all cyber insurance companies are equal, some cover more than others, but there are some commonalities between all home cyber protection coverages. When it comes time to purchase your policy, there are a few considerations you need to keep in mind, such as how much coverage you need.

In general, around $15,000 worth of coverage is an excellent baseline to start for homeowners because the average cost of a personal cyber attack is about $5,300. If you believe that you have a high financial risk, you may want to purchase a higher policy.

What Events Are Covered?

As mentioned earlier, some cyber insurance companies can offer more than others, and they can cover different types of cyber events. At the very least, your policy should at least cover protection for ransomware attacks and identity theft.

Other common coverages:

  • Viruses and malware
  • Cyberbullying

You may add any other coverages available to you to your policy at an additional cost.

What Will the Policy Pay For?

Just because your policy states that it will cover a specific cyber attack event, it does not mean that it will pay for all of your incurred expenses. To ensure that you have adequate coverage, be sure to check to see if your coverage will pay for extortion payments and equipment replacement. Some insurance companies also cover for legal fees, lost wages, and software replacement.

How Is Their Customer Service?

When shopping for new insurance policies, many people overlook the customer service factor and focus more on the policy’s price. The cheapest policy available won’t be of much use for you if you can’t reach someone after you suffer a cyberattack.

Before you commit to any insurance company, be sure to check out their reviews on their website or on third-party review websites such as the Better Business Bureau or Google Reviews. If they have a page on Yelp, you can check that out too. Be sure to review what other clients did or did not like about working with the company so you can gauge how they will treat you as one of their insureds.

How Much Does Home Cyber Protection Cost?

Last but not least, you should compare the price of a couple of different companies before you sign any contracts. In general, most personal home cyber protection policies cost around $20 to $50 for $25,000 worth of coverage. Of course, there are many different factors your insurance company’s underwriting department will take into consideration when they write your policy, so your premium will vary.

How Does Personal Cyber Insurance Work?

If you suffer from a cyberattack, you can file a claim with your insurance company to help you pay for any direct financial losses and other expenses such as document recovery or legal fees covered by your policy. As mentioned earlier, your policy will have a coverage limit of how much it will pay up to, and your coverage may be subject to a deductible.

For example, you may opt for a cyber insurance policy with online fraud coverage with a policy limit of $15,000 and a $500 deductible. Say you donated $3,000 to a fake charity, and you were unaware that it was a scam.

You will then file a claim with your insurance company, and they will review it to see if the event is covered. If they decide that it is, they will send you a check for $2,500.

Ransom Payments

In the event that someone steals your data and demands a ransom in exchange for payment, your insurance company may approve payment for cyber extortion cases. Even if your insurance company provides you with the ransom payment, it is best not to pay the cybercriminal as soon as you receive the payment.

The FBI recommends not paying the ransom because it does not guarantee that they will release the data back to you. Instead, they may request additional payment after receiving the first one.

How to Prevent Cyber Attacks

You can take several different steps to help prevent your family from cyberattacks, such as user identity theft protection services. Your credit card company may provide you with an identity theft monitoring service, but that may not be enough. It would be best to invest in purchasing a separate service to keep track of your identity and to help you recover from any financial losses.

Other ways to prevent cyber attacks:

  • Don’t save your credit card information online
  • Back up digital information
  • Change your password at least once every two months
  • Use two-step authentication

Another great way to prevent cyber attacks is to use safer payment options such as your credit cards. They are generally safer to use online instead of debit cards. When changing your password, be sure to use a secure password manager to save your passwords.

Common Cyber Insurance Claims

Cyber insurance policies cover several types of cyberattacks, but a few show up more than others, such as data breaches. Many cybercriminals gain access to your personal identification information due to weak passwords or not enough cybersecurity in place. Once they find that vulnerability, they make plans to take your personal information and use it to get into your job’s systems in addition to your personal devices at home.

Cloud Hacks

Many hackers use phishing attacks to gain access to your cloud accounts. Once they get into your cloud, they can use cloud infrastructure to jump from one account to another in a matter of moments.

Account Takeovers

The most significant number of cyber insurance claims come from account takeover attacks. In this type of attack, the cybercriminal gets into your personal bank accounts and credit card accounts, and they use the information to make fraudulent transactions. You may not even realize that someone has your credit card or account information until they make large purchases.

E-Commerce Shutdowns

Not all cybercriminals hack into your systems for money; some do it to shut down businesses. If you have a small business that you run out of your home, they may be able to get into your website and shut you down completely.

Protect Your Household Today

Suffering from a cyber attack has the potential to turn your life upside down completely. Not only can they possibly drain your bank account, but they can get into your work information or shut down your small business.

As technology advances, so do cybercriminals. To best protect you and your household, getting a home cyber protection policy is best. Contact us now for a free no-obligation quote!

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