Why Add a Cyber Insurance Endorsement?
February 8, 2024
Cyber-crime is a growing threat to the global economy. According to the 2022 Internet Crime Report released by the Federal Bureau of Investigation’s IC3, bad actors continue to target Americans with losses exceeding $10 billion annually. According to the agency, malicious cyber activity threatens both our public safety and economic security.
Although antivirus software, fraud alert and credit-monitoring services can help mitigate your risk from cyber-crimes, these options are not a foolproof defense against financial losses. If you or a family member are a victim of a cyber-attack, you may have to pay to recover hijacked personal files, to restore stolen identity, or to protect a child from cyberbullying.
Online scams utilize deceptive tactics like a fake charity that tugs on your heartstring or a fraudulent government agency (with a familiar name) that seeks immediate payment for an overdue fine. Scammers also pray on seasonal bargain hunters shopping online for end of the year specials or making online holiday purchases for Valentine’s or Mother’s Day.
Beware of too-good-to-be-true deals...
The FBI warns everyone to beware of too-good-to-be-true opportunities. Online fraudsters are typically looking for a quick way to procure illicit funds. Maybe it is a limited sales event or a once in a lifetime purchase that demands payment solely through gift cards you're instructed to purchase, the scammers goal is the same and that’s online theft.
Any bargain hunter searching online for deep discounts on highly recognized brands and products should consider putting safeguards in place like personal cyber insurance. Moreover, since most credit cards have several layers of built-in security, making payments with a credit card is usually the safest way to shop online.
Whenever possible, set up multi-factor authentication on all credit cards and banking accounts that allow it. Even if you avoid online shopping all together, there can be cyber perils waiting in your email inbox with an enticing document title or marketing tagline. So avoid clicking on unsolicited emails and text messages, especially if it seems too-good-to-be-true.
Online Crimes and Cyber Risks
Cyber-crimes are nothing new. Online scams and consumer fraud have been around for years. What has changed dramatically are the scope and sophistication of online techniques being used by perpetrators around the world. Consumer groups like AARP and agencies like the Internet Crime Complaint Center provide consumer and industry alerts about new cyber schemes as well as proven methods of online deception, such as:
Identity Theft – Be cautious about personal information you share in online profiles and social media accounts. Sharing things like pet names, schools, and family members can give scammers the hints they need to guess your passwords or the answers to your account security questions.
Spoofing & Phishing – Spoofing and phishing are distinct cyber threats. Spoofing calls impersonate or pretend to be someone or something else to gain your confidence with malintent. Phishing scammers use email or text messages to steal passwords, account numbers, or personal data like Social Security numbers and then sell or use your information.
Ransomware – Malicious software (malware) is designed to block computer files and deny access until a sum of money is paid. Encrypto-ware encrypts the victim’s data. Locker-ware uses a virus to infect PCs and lock files. Leak-ware steals sensitive info and threatens to release it, and scare-ware instructs the user to download a fix-it program.
Email Compromise – One of the most costly cybercrimes involves exploitative scams that rely on your personal or business email accounts. Examine the email address in all correspondence and scrutinize website URLs before responding to a message or visiting an unfamiliar website.
Cyberstalking & Cyberbullying – These malicious cyber activities can threaten your family’s safety, as online predators and cyber adversaries stalk and bully victims online. Online predators and cyberbullies harass, embarrass and target people online with mean, aggressive, rude, or sexually-explicit texts, tweets, posts or messages.
If you are the victim of an online scam, the timely reporting of an internet-enabled crime can help support every effort to recover your lost funds. Unfortunately, law enforcement agencies across the country are up against warrant-proof encryption, which means that even with a warrant it can prove next to impossible to investigate and prosecute cyber-crimes and cyber-security threats.
Personal Cyber Insurance vs Identity Theft Protection
Cybercriminals have numerous online entry points to access your life, such as computers, cell phones, gaming systems, and even smart home devices. This means it open season for ne’er-do-wells to steal your identity, run up credit charges, block your access to your own personal data, and target your children. Cyber insurance options typically cover first-party loses incurred and may provide coverage for legal and forensic expenses.
Like other types of insurance coverages, personal cyber insurance or identity theft protection will not prevent cyber-crimes from happening. But, these can help you recover if you’re a victim of a cyber-attack or fraudulent scammers, such as:
Personal cyber insurance – Personal cyber insurance covers a range of cyber-crimes such as cyber extortion, cyberbullying, online fraud and data breach and is often added to homeowners, condo or renters insurance policies. Home cyber insurance helps when you or a family member are a victim of a computer attack, home system attack, cyber extortion, online fraud or data breach, even when online purchases are stolen by cyber criminals.
Identity theft protection – Reclaiming your identity can be slow and costly. Identity theft insurance can also be an add-on for your homeowners, condo or renters insurance; or as standalone coverage. When a cybercriminal wrongfully obtains and uses someone’s personal data to open fraudulent credit card accounts, make charges to an existing card, withdraw funds from bank accounts, or obtain new loans, identity theft protection can help you recover.
Depending on your insurance company, you may be able to add personal cyber insurance as an endorsement to your home, renters or condo insurance. If you are the victim of a cyberattack, you can file a claim to help pay for legal expenses and direct financial losses as covered by your personal cyber insurance or identity theft protection policy. If you use smart home devices, consider using one network for gadgets and a separate network for computers, tablets and cell phones.
At Nsurance Nation, our independent agents are licensed insurance professionals who do not work for a particular insurance provider. Similar to a financial advisor, they are trained to look out for your assets, compare coverages, and streamline the shopping experience. Contact Nsurance Nation to find out if personal cyber insurance or identity theft protection can be added to your homeowners, renters or condo insurance policy.
