What is personal cyber insurance, and is it for you?

By: Sadaf Ahsan on May 14, 2024
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As technology evolves and cyber-crime rises, it may no longer be enough to have a convoluted combination of letters, numbers, and punctuation marks for a password, or multi-step authentication to protect your online accounts and activity.  

Learn what personal cyber insurance is, and how to get added protection for your presence online. 

How common are cyber-attacks? 

You’ve likely heard of the more high-profile examples of ransomware attacks everywhere from the Toronto Public Library, whose system was left crippled leading to a network rebuild, to SickKids, which saw week-long delays in lab and imaging results.  

Individual people can be victims of cyber-attacks, too.  

Take, for example, the countless Canadians who are scammed out of thousands each year by simply clicking on a bad link (called a phishing attack) or duped by cyber-criminals on dating apps and social media networks pretending to be real users (known as catfishing).  

Many cybercrimes remain unreported due to shame. In 2022, there were 74,073 police-reported cybercrimes in Canada, resulting in $530 million in victim losses. This is an increase from 2021, when there were 71,727 incidents totaling $380 million, and nearly half the number reported in 2018. 

Read more: It’s time to talk about the rise in call scams and fraud 

What is personal cyber insurance? 

The Government of Canada warns that cybercrime activity in the country is likely to increase, particularly as cyber-criminals continue to evolve their tactics. 

This is where personal cyber insurance comes in.  

Dominic Vogel, a Port Coquitlam-based cyber risk advisor says that personal cyber insurance is meant to protect individuals from different forms of digital crime.  

“Should your personal bank account be compromised, whether it be identity theft or a whole slew of digital crimes, it's an added measure of protection just like home insurance or car insurance,” he says. 

If you haven’t heard of it before, you’re not alone. Personal cyber insurance is a relatively new concept and has only recently begun to gain traction. Most cyber-attacks still target businesses – big and small – rather than individual people

In general, along with ransomware attacks, common cyber threats include malware, phishing, pharming, and vishing (voice phishing). 

Related: Do you use a third-party budgeting app? It could nullify your account protection 

Who might need personal cyber insurance? 

Although we all use the internet probably every day, it doesn’t mean we all need personal cyber insurance right now, considering it isn’t as mature or well-established yet as, say, home insurance. 

“Is it something people should rush out for? No, I don't think it's quite a necessity yet,” says Vogel. “Depending on your risk exposure or tolerance, something like this can help provide some level of comfort and peace of mind.” 

If you work from home, run your own business or have a high net worth, it might benefit you.  

While coverage is broad, it specifically protects you in cases where your identity might be compromised through your own doing, and no one can be held accountable apart from yourself. (This is also how it differs from business cyber insurance, where a larger company might hold part of the blame thanks to poor cyber protections.) 

You may also want to consider it if you’re part of an older demographic. According to a 2022 RBC Cyber Security poll, Canadians over 55 are significantly more likely to be concerned about cyber threats and are worried about unauthorized access to online accounts or personal information, having their email or social media account hacked, or being a victim of online fraud and scam.  

In 2023, a 34-year-old Brampton man was charged in a year-long international fraud scheme that specifically targeted elderly folks across Canada. The victims lost hundreds of thousands of dollars in the scam.  

In the first half of 2023, seniors aged 60 and above lost a staggering $96.8 million to fraud, accounting for 34% of total losses from fraud in Canada, and half of the losses from cyber-related fraud.  

Perhaps because seniors are often seen as the most common target of cyber fraud, concern about cybercrime rises with age. Approximately 75% of those aged 55 to 64 worries about becoming victims of cybercrime, and this number increases to 81% for those aged 65 and older. 

Vogel says it’s important to read the fine print when you do go in for cyber insurance, as coverage can vary greatly.  

“It's not like home insurance, which has been fairly standardized for many, many years,” he says.  “This is an emerging tool.” 

He says it’s important to talk to your broker to know what your options are, to pinpoint where your concerns lie, and see if there is coverage that can reduce that worry.  

Inquire about available premiums, what is covered, and what isn’t.  

Read more: My landlord is asking for my Social Insurance Number (SIN). Should I give it? 

Is it possible to find coverage in other ways? 

If a hacker gains access to your car’s WiFi network and uses it to steal your car or other personal information, would it be covered under your car’s insurance or cyber insurance?  

“These are the types of questions that need to be asked and answered,” says Vogel. “The answer right now is that it depends and it's very muddled.” 

Vogel goes on to explain that as time goes on, insurance companies will be able to provide detailed cyber insurance coverage as they become more familiar with what individuals need and how best to provide it for them.  

For instance, we might one day see personal cyber insurance be included as an add-on or built into home or auto insurance, functioning much like a stand-alone product. 

“Especially as the boundaries between digital life and real life are gone; they're integrated,” he explains. “I think, right now, insurance carriers are going to try mixing and matching to see where the most ground is. This is a period of experimentation.” 

Related: Does auto insurance protect you from cyber attacks? 

Where can I buy cyber-crime insurance? 

A handful of companies currently offer personal cyber insurance as an endorsement or add-on to your existing home insurance policy.  

Aviva Canada, for example, offers it with a starting price of $6 per month and a cyber expert on standby if you have questions. It covers online fraud, computer attacks, home systems attacks, identity recovery, data breach, cyber bullying, and cyber extortion.  

NFP offers similar coverage, with limits of up to $25,000 of coverage at $9 per month, as does Easy Insure, which also offers coverage of up to $25,000 for around $8 a month. 

While the average individual might not need to run out and buy personal cyber-crime insurance tomorrow, it’s still important to know what cyber-crime is, how it’s evolving, and how it could one day affect you depending on your career and lifestyle. 

The bottom line?  

“People just need to be aware that, where we are in life right now, cybersecurity is not something that only big companies need to worry about,” says Vogel. “A little awareness goes a long way.” 

Read next: How is technology changing the auto insurance industry? 

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