What is Personal Cybercrime and Does Your Home Insurance Policy Cover It?

Posted on May 31, 2019

Are you fully protected in the event of being a victim of cybercrime? Will your cyber insurance policy be in place and ready to help you recover any losses?

If you want to know what cybercrimes could impact you and make sure you're covered, check out this simple guide!

What Is Cybercrime and How You Are at Risk

Technology continues to make our lives better and easier. However, the more connected your home or small business is, the greater the risk unsecured networks and devices pose. Without personal cyber insurance, you could lose your current assets and severely damage your financial future.

While there are many different levels of cybercrime, there are many risks that you should be aware of. One of the most common and hardest-hitting is known as identity theft.

Identity theft is where cybercriminals gain access to your personal information, such as your credit cards, banking details or social security number. Using this information, they run up as many charges as they can while putting in fake financial applications in your name. The result can leave your credit rating in tatters, cost you your entire bank account and even ruin your small business.

If you are a small business owner, you are significantly at risk. Your client's personal information like names, addresses and credit cards could be exposed to theft. Without cybercrime insurance, you could be at risk of lawsuits if you fail to take due precautions.

If you fail to secure all devices connect to your network, you are creating vulnerabilities for your data. Smart homes and Wi-Fi connected devices like door locks, printers, and even security cameras can create an opening for cybercriminals.

The Menace of Malware

Another major threat to your information is known as malware. Malware can be found almost anywhere on the internet, from scam emails and pop-ups to fake websites and espionage. A malware attack can be either self-inflicted or come from an outside source, but the result can be devastating regardless.

Once the malware takes hold, you could have all of your personal and financial information spread all over the internet. Smart homes, in particular, are at risk for potential cybercrime. The more connected your home is the more potential openings for viruses and malware.

Imagine being locked into or out of your home against your will. Having your smart fridge recording videos of you without you knowing. Hackers can manipulate your home's temperature and turn your security system against you.

Another grim possibility is that your computer could be used to commit criminal acts without you ever knowing. Hackers often use malware to create zombie nets or bot nets. These are networks of infected computers that act together.

These improvised supercomputers are then used to attempt illegal activities. Denial of service or DDoS attacks that shut down websites with brute force use bot nets for raw power.

They can also be used to power algorithms protecting government data and infrastructures. If you do not take proper care in protecting your devices, you may be at risk of criminal liability.

The Rise of Ransomware

A newer and more subtle threat is known as ransomware and can impact anyone from individuals to an entire city's infrastructure. Ransomware operates by infecting your computer with a virus that makes it appear that the police have shut down your computer. They even match the police organization to the country, like the FBI for the United States or Scotland Yard in the United Kingdom.

The virus will accuse you of viewing illegal materials, will lock your computer and threaten legal actions against you. You will be offered a chance to pay a one-time sum of hundreds or thousands of dollars to unlock your device and avoid prosecution.

On May 7th, 2019, the city of Baltimore, Maryland, was hit with a ransomware attack that crippled its digital infrastructure for weeks.

You should be aware that even with the ransom paid, the malware usually remains on the computer and operates more discretely. The only real way to get rid of ransomware involves seeking professional assistance.

Common Hacking Methods

Cybercriminals can get your information in a variety of ways. Programs known as keystroke loggers keep track of every time you use your keyboard, allowing them to capture your passwords.

A technique called spear-phishing involves cybercriminals sending you fake messages. They look like real websites asking you to reset your password.

Cyberstalking presents a substantial risk to more than your wallet. These risks can take the form of endless threatening or harassing digital messages to you or those you know. Cyberstalkers can impact your business, your job and even your sense of safety.

If you have a shared computer in your home or business, everyone needs to be aware of what to look out for. If you receive a notification to reset your password, verify it by calling the company to confirm if it's genuine.

Warning signs include the computer's mouse begins acting by itself or web pages begin opening on their own. If this happens, seek professional help immediately.

What Is Personal Cyber Insurance and Why You Need It

The more electronics you have, the greater the risk of having your devices compromised. If you don't know whether your personal or home insurance will cover you if cybercrime happens, you're not alone.

The coverage of cybercrime varies between companies and the level of policies. If you wait to find out how well you're covered, it could be too late to get protection.

Getting cyber insurance can be done in a couple of ways. You can purchase personal cyber insurance as a stand-alone policy, which is done to protect your small business. If you are thinking of buying a comprehensive home policy, you should get cybercrime coverage included.

You might be surprised to learn that most insurance companies do not offer coverage for cybercrime. This is partly due to the fact that insurance coverage varies from company to company.

It is also important to note that identity theft production only over that particular crime. Personal cyber insurance will cover a wide variety of offences.

How A Cyber Insurance Policy Works

Like other kinds of insurance, cybercrime policies protect you up to the limit of your coverage. This will only happen if your money or personal information is compromised.

It is important to know what exactly your policy covers though, as someone stealing your bank account is different than you paying a ransom to use your computer again. If your particular incident is not covered, you could end up out of pocket and very frustrated.

You may be thinking that if you have identity theft coverage, you have nothing else to worry about. Due to the increasing number of different cybercrimes, you may not be safe from threats to your data. Depending on the policy you purchase, you may not have coverage when you need it most.

The risks of cybercrime can also vary from area to area. In 2017, there were almost 42,000 cases of cybercrime in Pennsylvania while New Jersey had around 8,000 instances. While you should strongly consider getting personal cyber insurance regardless, where you live and work can influence your decision.

Cyber Insurance Costs and Services

There are three major insurance companies that offer personal cyber protection. They are AIG, Chubb and the Privilege Underwriters Reciprocal Exchange or PURE. Depending on the level of protection, a yearly policy would cost you between $127 and $1,626.

While all three companies will protect you from extortion, Chubb offers personal and financial loss protection. PURE covers cyberattacks and fraud while AIG provides crisis management, cyberbullying and data recovery services. As you can see, taking care to select a policy that meets your needs and your budget is very important.

Cyber extortion involves the theft of your sensitive personal data or preventing you from accessing it. If you have you have proper coverage, the company will get your money back and even investigate the incident so you can be better protected.

Cyber financial loss protection helps by making sure you get your money back. This means you are covered if you lose your salary, your funds are stolen or you get fake charges on your credit card from cybercrime. Any legal fees that happen during your claim will also be covered.

Cyberbullying involves cyberstalking, fake business and product reviews. It can even direct harassment of you and your loved ones. With this coverage, you will be safe from any expense related to cyberbullying, from being wrongfully fired to mental health bills and lost salary.

Data recovery protection will cover you if your data is stolen or held for ransom. If you have customer information or proprietary data to protect, you should take care to include this in your coverage.

Make Sure You're Covered

Given the ever-increasing number of digital threats to your information and livelihood, it is more important than ever to be properly covered. If you want to learn more about a cyber insurance policy that meets your needs, check out Insurdinary Personal Insurance today!

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