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The future is data-driven. But given that colossal amounts of data are collected every day to support internet-enabled devices, new risks crop up all the time — risks that used to be almost exclusively the lot of businesses. Data Security has become a major concern for these systems, as they collect a prodigious amount of sensitive info about the end user. But if cybersecurity fails to protect users’ private data, having the right insurance policy could help protect them from financial stress.
Smart home technology, for example, relies on data collection and sorting, allowing the systems (and the manufacturer) to learn about and adapt to our unique habits. That rich reservoir of data is a goldmine, not only for businesses but for hackers, too.
Smart Homes Aren’t Hack-Proof
Take a smart thermostat, for example. It learns your preferred temperature settings at various times of day, for specific rooms in the house. That means it knows when you are and aren’t home and which rooms are occupied most. Smart devices partake in an ecosystem with other devices that also tailor their settings to your liking. In this ecosystem, they share massive quantities of data with each other. Breach one device, and you breach them all.
Back in 2016, Dyn, an internet routing company, was attacked by hackers who corrupted ordinary smart home devices, such as DVRs and webcams, and used them to hurl a barrage of fake messages at Dyn. As a result, Dyn crashed and users were cut off from popular websites like Netflix, Amazon and Twitter.
A New Opportunity for Insurers
While cyberattacks aren’t rampant for home systems yet, the growing number of connected devices creates new portals for cyber thieves. Those of us smartening up our living areas need to prioritize cybersecurity. But at the same time, insurers may also need to rethink some of their coverages. Similar to what cyber insurance offers companies, a standard homeowners policy might soon redefine “property” to include your digital identity.
The amount of data being collected about us means ample pickings for hackers. The right line of protection, however, could help remedy any damage from data breaches ASAP. Identity theft insurance is typically treated as an optional add-on for many home insurance policies, but future policies could treat a person’s data like any other covered property — say, a laptop, TV or piece of furniture.
Standardization Is Key
Cyber insurance is a fast growing industry, and its next biggest step is standardization, which can help eliminate ambiguity in what is and isn’t covered. The insurer and insured know exactly what the terms are and no one’s met with unwanted surprises.
For example, when you shop around for car or home insurance, it’s usually easy to compare policies apples to apples. Many insurers have similar coverage offerings, so it’s just a matter of finding the ones that make sense for you and going from there. Safeguarding our identities, privacy and cybersecurity in the future may be much easier with the availability of policies that protect individuals rather than corporations. That way, if our personal data should be breached or fall into the wrong hands, we can quickly pick up the pieces and minimize the impact on our lives.