Homeowners, renters can get cyber protection coverage in California

Are you protected from an attack?

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Most people wouldn’t equate cyber protection with homeowners and renters insurance.

But Mercury Insurance has tied them together. The Los Angeles-based insurer announced Wednesday, Sept. 4 it is offering home cyber protection coverage to homeowners, condo owners and renters in California.

The program — rolled out earlier this year to customers in Arizona, Georgia, Illinois, Nevada, New Jersey, Texas and Virginia — reflects the growing use of technology among consumers and the corresponding rise in cyber-attacks, according to Jane Li, the Mercury’s director of product management.

“Homeowners and renters have enjoyed the added convenience provided by computers, tablets and smartphones, but these devices create new opportunities for cybercriminals to infiltrate your home,” Li said.

 

Mercury’s cyber protection plan is a bundled coverage that protects individuals and families from compromised data on personal computers, mobile devices and other connected home technology, as well as damage to software and operating systems.

The coverage includes:

  • Payments to recover data and restore systems that have been lost or damaged due to a cyber-attack – including ransomware attacks involving malware or unauthorized use of devices.
  • Professional assistance by cyber extortion experts when responding to ransom demands.
  • Protection from online fraud that results in a direct financial loss to a covered policyholder.

The coverage, which includes a $500 deductible per occurrence, can be added to an existing homeowners or renters insurance policy with an annual premium of $30 for a coverage limit of $25,000 and $41 for a coverage limit of $50,000. It protects families whether they are at home or away from home.

“An example of a cyber-attack claim is if you receive a ransom demand on a computer after noticing your files are locked,” Li said “The demand states that you need to pay $2,000. Mercury will review the claim and if credible, cover the insured’s loss.”

Coverage is initiated when a customer discovers a cyber-attack, cyber-extortion threat or cyber-related fraud. Those who report a claim within 60 days will have full coverage from losses caused by cyber-attacks.

“The coverage is very new in California so usage is a little low, but it’s growing nicely,” Robert Hernandez, Mercury’s research and development product manager said via email. “So far, about 18% of Mercury’s new customers in California have added this coverage since it was launched. We expect this to grow to about 25% to 30% in the future.”

Mercury isn’t the only insurer offering cyber protection. Others include Liberty Mutual Insurance, Allied Mutual Insurance, BCS Insurance and Travelers Companies, among others.

Statistics show cyber attacks are a growing threat.

A 2018 online survey from The Harris Poll reveals that nearly 60 million Americans were affected by identity theft, up from 15 million in 2017. Another study from Juniper Research estimates cybercriminals will steal roughly 33 billion records in 2023.

And if that wasn’t bad enough, additional statistics from Norton show the U.S. is far and away the biggest target for cyber attacks. Between 2015 and 2017, 38% of the attacks occurred in the U.S.

India ranked second with 17%, followed by Japan (11%), Taiwan (7%), the Ukraine and South Korea (both 6%), Brunei, Russia and Vietnam (each at 4%) and Pakistan (3%).

“It’s a good idea to consider investing in a comprehensive cyber safety product to help protect your devices, personal information and home,” Norton said. “After all, the last thing you want is to become a statistic.”

Fitch Ratings reports that the cyber insurance industry in the U.S. grew 8% in 2018 to approximately $2 billion in payouts.

Insurance Journal‘s list of the nation’s top five cybersecurity insurers (ranked by direct premiums written and market share) includes:

  • Chubb $325.8 million (16% market share)
  • AXA US $255.9 million (12.6% market share)
  • AIG $232.6 million (11.4% market share)
  • Travelers $146.2 million (7.2% market share)
  • Beazley $110.9 million (5.5% market share)

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