About One-Third of Connected Tech Owners Experienced Identity Theft, Yet Only 15 Percent Have Cyber Insurance, Finds Study by J.D. Power and Insurance Information Institute
More than four out of five American consumers who own connected devices either lack insurance to protect them from cyberthreats or don't know if they are covered, according to the
The study shows evidence that the number of digital identity theft victims has been steadily growing. Nearly a third of people who use connected technology said they have been the victim of identity theft, up more than six percentage points from a 2014 poll of cellphone and land line users conducted by the I.I.I. that found 25 percent of respondents were affected. And despite the increasing reports of cyber breaches compromising millions of Americans' identities, the survey found three-quarters of connected technology users are not willing to pay for cyberrisk coverage.
While respondents to the study were resistant to insurance coverage to mitigate online security risks, 32 percent said they changed the way they used social media or connected technology after learning about incidents like the Facebook/
Consumers participating in the
According to the
* Many Americans (63 percent) have at least one connected device in their home. Ownership of these devices is highest among 25-to-34-year-olds and lowest among people over the age of 65.
* Among those who have connected devices in their homes, the most popular are voice command assistants such as Amazon's Alexa or Google Assistant. Close to half (45 percent) who indicated that they have some form of connected technology in their homes own them. Almost a third own connected thermostats and wearables, such as Fitbits (29 percent and 27 percent, respectively), and one-quarter of these consumers have connected security cameras, door locks, doorbells and connected appliances.
* Almost a quarter of connected technology users said convenience is the main reason they chose these devices for their homes or cars (24 percent), while about one-fifth cited security and safety (19 percent). Fewer users cited a desire to have new technology as the main reason to choose connected technology (16 percent).
* Six out of 10 people who own connected technology said they do not have privacy or cybersecurity concerns related to their connected devices (62 percent). Yet almost half said they have taken steps to protect their privacy or security (46 percent), pointing to a substantial number of people who may look to cyber coverage to help in mitigating their cyber exposures.
"America's interest in connected technology shows no signs of abating," said
As more connected technology becomes available, the I.I.I./
"As more consumers adopt home and vehicle devices that collect and store personal data and use online shopping and sharing networks, personal cyberrisk insurance is becoming an increasingly important component of homeowners and renters policies," said
Insurance policies can differ by company, sometimes substantially. Yet the typical homeowners or renters policy only covers stolen identity risks via an endorsement that must be added at the policyholder's request. Known as identity restoration coverage, the endorsement helps policyholders after their personally identifiable information is stolen. Expenses such as attorney fees and lost wages may be covered, and a fraud specialist may be available to manage the restoration process.
As an alternative, some insurers offer stand-alone policies that cover identity restoration, along with professional assistance for responding to personal ransomware attacks and malware removal, as well as reprogramming computers and other devices such as Wi-Fi routers.
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