Do you need to buy household cyber insurance?

Insurance is ever-evolving to tackle new, serious threats to homeowners, drivers, businesses, and families alike. One threat that’s starting to rear its ugly head more and more, although not new, is cybercrime. While cybercrime is mostly a threat to businesses and organizations, households and families have been known to fall victim to this unique threat.

How do we protect ourselves? Is it necessary to buy cyber insurance for your household?

Cybersecurity is becoming a serious issue in the U.S.

Malicious attacks aren’t specific to large businesses, or even just businesses alone; criminals sometimes target households due to their typically insecure security or exploit unattended vulnerabilities in personal networks, stealing financial data, personal information, and more to use for ransom.

In just 2023 alone, phishing attacks in the United States increased by 1,265%! This was attributed primarily to the growth of generative AI and may continue to scale as an issue as more and more AI tools begin to roll out on the market. Here are some of the more common methods used by cybercriminals to exploit both technologies and human behavior:

  • Phishing: Perhaps one of the most common means of cyberattack, phishing involves sending deceptive emails, text messages, or social media messages that appear to be from reputable sources, aiming to trick individuals into providing sensitive information such as passwords, credit card details, or personal identification.
  • Malware: Malicious software, including viruses, worms, Trojans, and ransomware, can infect devices and compromise data security. Malware is often distributed through malicious links, email attachments, or compromised websites.
  • Unsecure Networks: Hackers may exploit vulnerabilities in unsecured Wi-Fi networks to intercept sensitive information transmitted over the network. This can include login credentials, financial transactions, or personal communications.
  • Identity Theft: Criminals steal personal information, such as social security numbers, bank account details, or passwords, to impersonate individuals or commit fraud. This information can be obtained through data breaches, phishing, or social engineering attacks.
  • Fake Software Updates: Cybercriminals may distribute fake software updates or applications containing malware, exploiting individuals’ trust in legitimate software vendors to infect their devices.
  • Remote Access Tools: Cybercriminals may gain unauthorized access to individuals’ devices using remote access tools or malware, enabling them to monitor activities, steal data, or deploy additional malicious software.

Does my home insurance protect me against cybercrime?

Some home and renter insurance policies automatically include a certain level of coverage against identity theft, or at least offer a special endorsement for identity theft. However, cyber insurance is a relatively new offering, and not all home insurance companies sell it.

For those that do, personal cyber insurance is typically designed to cover the following:

  • Cyber extortion coverage, providing you the necessary funds you require to recover from ransomware attacks that could bar your information behind a paywall. You could also receive reimbursement for hiring assistants who can help you regain your data.
  • Cyberbullying coverage, which can help compensate you for online harassment potentially resulting in discipline from school, wrongful termination, relocation expenses, lost wages, legal expenses, etc.
  • Data breach coverage, which helps pay for the cost of hiring services if any data entrusted to you is lost, stolen, or even leaked.

You may also receive access to services for lawsuit protection, cyber monitoring, fraud investigation, electronic data repair, etc., with personal cyber insurance.

How does personal or household cyber insurance work?

Personal cyber insurance, also called cyber liability insurance or even cyber risk insurance, is designed to provide household members with a layer of financial protection in the event of a cyberattack or digital loss. Every personal cyber policy varies in what it covers, so be sure to work with your provider or agent to ensure you have the protection you need.

Coverage activates in the event of a triggered loss, at which point your insurance policy may provide you with financial compensation for losses incurred. This could be reimbursement for funds stolen via online fraud, providing funds to pay a ransom demand, or covering the costs to restore personal data.

Personal cyber insurance also often comes with legal assistance and/or the coverage of legal expenses incurred as a result of cyber-related incidents.

Do I need personal cyber insurance?

Whether you’re managing sensitive financial information, conducting online transactions, or simply using social media (like most of us do!), the prevalence of cyber threats in today’s digital landscape makes it at least strongly recommended that most households consider purchasing cyber insurance.

Personal cyber insurance offers peace of mind by providing financial protection against these potential threats, covering expenses such as legal fees, identity restoration, and financial losses. By investing in personal cyber insurance, you can protect yourself and your household against the potential consequences of cyber incidents.

Considering cyber insurance?

Give us a call. While cyber is still a mostly unknown risk, it’s important to be proactive and take the necessary measures we need to defend our personal data. Cyber insurance can provide an extra layer of security that we wouldn’t otherwise have, granting us peace-of-mind when using technology. As cyber risks evolve, so does insurance! Give one of our agents a call to discuss cyber insurance, its benefits, and whether it might be time to consider adding it to your home or renters insurance policy.

Understanding flood coverage in renters insurance

You may already know what an “endorsement” in insurance is. You may already know that a standard home policy won’t cover flooding, and that in order to have flooding coverage in your policy you’ll need to purchase an endorsement to modify your existing coverage. This makes sense with home insurance. Water damage can be detrimental to someone’s property.

What you may not know is that renters are eligible for flood insurance as well, even while renters insurance doesn’t insure the physical unit where you live it does insure your belongings, which could be at risk if your unit were to flood. Flooding occurs in every U.S. state and just a few inches of standing water can cause irreparable damage to your belongings. Here’s what you need to know about flood coverage in renters insurance.

An overview of renters insurance

Renters insurance, also referred to as tenant insurance, is a crucial financial safeguard for individuals and families who are residing in rental properties. It offers protection for personal belongings, liability coverage, and additional living expenses in the event of covered perils such as fire or theft. However, there’s a notable gap in standard coverage regarding floods, a peril that can cause significant damage to property and possessions – especially in some areas of the U.S., and especially for those residing in “at risk” homes or units, such as those on the ground floor or below-ground, and those near lakes, rivers, and in low-lying regions or valleys.

Mending the gap: Adding flood coverage to renters insurance

Floods, though not always top of mind for renters, can pose a substantial risk, especially in certain geographical areas. Many standard renters insurance policies don’t automatically include coverage for flood-related damages. To bridge this gap, renters have the option to add specific flood coverage to their policies. This additional protection ensures that the financial impact of flood-related losses, such as damage to personal property and the cost of temporary living arrangements, is mitigated.

Flood insurance, when added to a renters policy, typically insures against:

  • Overflow of tidal or inland waters, including flooding due to prolonged rain, overflow of rivers, lakes, or other freshwater bodies, and storm surges.
  • Flash floods, which can include sudden and intense floods (known as flash floods) which occur with little to no warning.
  • Mudflows and landslides due to heavy rainfall, although this isn’t true of every policy.
  • Storm-related flooding due to tropical storms, hurricanes, and other severe weather events.

Flood insurance will almost never cover tsunamis or saltwater flooding. Flood insurance will also not cover water damage due to poorly maintained piping or appliances which break and cause damage over time.

Flood insurance may insure you for the repair or replacement cost for your personal belongings damaged by flooding as well as the cost to temporary relocate elsewhere while your home/unit is being restored following a flooding event.

Quick Questions about Flood Insurance as a Renter:

How much does flood insurance cost to add to renters insurance?

The cost of adding flood insurance to renters insurance can vary based on several factors. These may include the location of the rental property, the level of flood risk in that area, the chosen coverage limits, and the insurer’s specific pricing policies. Generally, the cost can range from a relatively modest annual fee to a more significant amount, depending on the perceived risk of flooding in the region. Renters can enlist an agency like AHI to obtain an accurate quote tailored to their specific circumstances and see for themselves how much the endorsement will cost to add. Keep in mind that renters insurance on its own tends to be relatively inexpensive, and even the addition of flood insurance may still be far from “breaking the bank.”

How do I know if I need flood insurance as a renter?

Determining the need for flood insurance as a renter involves assessing what kind of risks flooding poses to you and your home. Factors to consider include the property’s location, proximity to bodies of water, historical flood data for the area, and local floodplain maps. Areas designated as high-risk flood zones by the Federal Emergency Management Agency (FEMA) are more likely to experience flooding, and obtaining flood insurance is often strongly recommended in these regions. Additionally, renters should consider the potential consequences of flood-related damages to their personal belongings and the cost of temporary relocation. If the rental property is in a moderate-to-high-risk flood area, or if there’s a history of flooding incidents, it’s not a bad idea for renters to seriously consider adding flood insurance to their renters insurance policy. We recommend reaching out to an expert agency, like AHI, to review your flood risk and provide you with valuable insights to help you make a more informed decision!

Is flood insurance something you should add to your renters policy?

As a renter, assessing your flood risk and considering the addition of flood insurance keeps you well-prepared for the potential damages to your personal property and living space that flooding could bring. At AHI Group, we are committed to helping you navigate the complexities of renters insurance. Take a moment to review your policy with us, ensuring that you have the right coverage to safeguard your belongings and provide peace of mind in the face of unexpected challenges. Your protection is our priority, and we’re here to assist you every step of the way.