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NEW YORK, March 10, 2020—Few U.S. homeowners and renters realize their existing insurance policies offer them limited identity (ID) theft coverage, according to the Insurance Information Institute’s (Triple-I) and J.D. Power’s 2020 Consumer Cyber Insurance and Security Spotlight Survey℠.
Standard homeowners and renters insurance policies generally provide financial protection to consumers if either their credit or debit card is improperly used, something only 11 percent of survey respondents were aware of. Slightly more than one in four (26 percent) said they would be willing to pay more beyond their existing homeowners or renters insurance premium for ID theft restoration coverage. The others were either undecided (39 percent) or said no (35 percent). ID theft restoration coverage usually costs less than $50 annually.
“The survey highlights the confusion consumers have about the cyber coverage they may already have and the persistent idea that cyber coverage is not a product for which consumers are willing to pay more,” said Sean Kevelighan, CEO, Triple-I. “The challenge remains for insurance professionals to educate consumers and inform them about the benefits of identity restoration coverage, and its value for helping them recover from thousands of dollars in personal losses.”
Homeowners and renters insurers are now offering endorsements to existing policies, or separate stand-alone policies, to pay for the costs associated with ID restoration, which includes “responding to problems such as personal ransomware attacks and malware removal, and reprogramming computers and other devices such as Wi-Fi routers,” the Triple-I and J.D. Power survey report states.
Consumers who use Internet of Things (IoT) devices—also known as connected technologies—in either their homes or autos are at risk of having sensitive information taken from them and used as part of an ID theft scheme. In a home, IoT technologies include voice command devices and thermostats which can be operated remotely whereas an auto’s adaptive cruise control and automatic emergency braking systems are also considered IoT devices. J.D. Power’s survey respondents consisted of 683 Americans who used connected technologies as of September 2019.
“Media reports of data breaches have become commonplace,” said David Pieffer, Property & Casualty Insurance Practice Lead, J.D. Power. “In 2019 about 1,470 data breaches were recorded. These breaches exposed about 165 million records containing personally identifiable information. This compares favorably with the 447 million records exposed in 2018, but vulnerability can be cumulative, as previously stolen records could still be fraudulently used.”
Written by Kevelighan, Pieffer, and James Lynch, the Triple-I’s Chief Actuary, the other key findings from the Triple-I and J.D. Power 2020 Consumer Cyber Insurance and Security Spotlight Survey℠ included:
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