As people increasingly spend more time working online, the threat of cyber attacks grows. Many insurers are now offering personal cyber insurance to minimize financial damage if someone gets hacked.

A recent email from my bank offered up something I hadn’t seen before; cyber insurance. “Cyberattacks are on the rise,” the subject heading read, “are you protected?” 

It piqued my interest because while most of us are aware we are vulnerable to cyber crime, we already know the steps we can take to protect ourselves. We use difficult passwords, two-factor authentication and try to steer clear of phishing scams. So I wondered whether this type of insurance would be necessary for me.

Personal cyber insurance can cover expenses related to identify theft, fraud, ransomware and even cyberbullying. My bank was offering policies with coverage ranging from $10,000 to $50,000. The least expensive policy would cost a little more than $5.00 per month. Customers wouldn’t need to meet a deductible for identity theft, but would have a $250 deductible for other coverages. Some insurance companies are offering this protection, often as an add-on to a homeowner’s insurance policy and have even higher options for coverage.

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A cyber insurance policy could cover a wide variety of online crimes including payment for a ransom demand in case someone hacked into and took control of your computer and demanded money to release it. It may cover fraudulent charges to a checking account by accessing it online or through a debit card. The coverage may also pay for legal fees and loss of income if a stranger hurts your reputation by posting fake or personal information online. It could cover your losses if you send money to someone in a phishing scam or in case a criminal steals your identity. The policy may also pay for mental health services if someone cyberbullies you or your child and may possibly even cover relocation expenses if necessary.

Should you look into a cyber insurance policy?

It will take some evaluation of your online habits to decide whether or not you should invest in a cyber insurance policy. Be honest with yourself about what you are doing to minimize your risk of a cyber attack. If you are participating in best practices to keep your online information safe, a cyber insurance policy may not be necessary. But if you, or a loved one, frequently falls prey to phishing scams, identity theft or has a public profile that may come under attack, you might consider purchasing some coverage.

While I’ve never had my identity stolen, a car burglar did get their hands on of some of my credit cards recently. None of the credit card companies held me responsible for the fraudulent charges. And you may want to check your homeowner’s insurance policy. Some of them cover certain types of fraud which may include crimes like identity theft and phishing scams.

Whether or not you decide to purchase personal cyber insurance, you can lower the risk of any cyber attack by taking preventive actions.

Do the two-step

Two-factor authentication adds one extra step when logging on to certain websites to make sure it’s really you. Sometimes the website will text a code to your phone or ask a security question or want a fingerprint ID. It’s not much to ask to double-check the right person is logging into a website with sensitive information like a bank account or a school portal.

Pump up your passwords

Birthdays, pet’s names and your favorite sports teams don’t cut it as strong passwords, even if you put the number one and an exclamation point at the end. Each password should be long, unique and complicated. Most devices help you out now with their own password managers, so use them. Some of those password managers are great about letting you know when you’ve duplicated a password (a big no-no) or when one has been compromised by hackers.

Use caution before clicking

Phishing scams can come through emails or texts and usually encourage you to click a link. Maybe you’ve seen some of the popular types that make the rounds such as, “Your Netflix account has been frozen,” or “Please login to your gmail account and update your password.” If you click, malware may download on your computer or you might go to a website that looks legitimate, but only exists to steal your information. Better to type in the known website address instead of clicking on any link.

Don’t wait to update

Hackers often find their way into your digital life through flaws in software. Making sure all devices and apps have the latest software updates can help. If you see the option for automatic software updates, turn them on.

Taking all of the precautions still can’t guarantee that you won’t be the victim of a cyber attack, but it might be enough to stave off the need to buy insurance against it.

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