Today’s criminals don’t want just your jewelry or car anymore —they want your digital property.

According to the FBI, there were nearly 8 million propertycrimes in 2015, with victims of these crimes suffering losses ofover $14 billion. Property losses were dwarfed, however, by nearly$30 billion in estimated losses that cybercrime inflicted on U.S.consumers in the past year, according to Symantec.

Digital risks are outpacing traditional risks, creating newopportunities for the home insurance marketplace.

The current generation of cyberattacks have begun to target thedigital devices and systems that connect us all on a daily basis,exposing novel areas of risk. Online cyber thieves encounter awealth of avenues to steal components of an individual’s identity,starting with something as simple as a social media account thatlists an individual’s birth date, which can be matched with otherstolen personal data to hijack an identity. Most people’s mobiledevices contain personal data that are a gold mine for hackers,including passwords to banks and healthcare portals and copies oftax statements with social security numbers.

Related: 6 home safety and tech devices for2017

On a daily basis, major retailers, banks and online providersreport stolen data, with each hack exposing more consumers.Juniper Research predicts that the rapid digitizationof consumers’ lives and enterprise records will increase the costof data breaches to $2.1 trillion globally by 2019, almost fourtimes the estimated cost of global breaches in 2015. At this point,the digital identities of millions of consumers have already beenexposed and offered for sale on the dark side of the Internet.

(Photo: iStock)

Today, however, digital risk is much broader than identitytheft. A new generation of risks has emerged as people spend moreof their lives on online. Fake news, Internet trolls and cyberbullying have notoriously victimized innocent people and businessesonline, causing reputational harm that can have devastatingconsequences. Most victims lack the skills or technology to addressreputational harm in the free-for-all of the internet.

Related: Top 10 states most vulnerable to identity theft andfraud in 2016

Once reserved for business owners and prominent public figures,ransomware is trickling into the consumer space, and malware hasbegun to infiltrate any vulnerable system that cannot defenditself. Criminals can purchase hacking kits online for just a fewdollars and they are turning their sights on security gaps in homesas well as businesses.

At the same time, people routinely expose themselves tocybercrime by sharing a wide range of personal details on socialnetworks. Birth dates and locations, addresses, schools, familymembers’ names and other affiliations can all be used toauthenticate an identity, and cybercriminals are all too ready touse these kinds of details to their advantage.

For many victims, the impacts can be life-changing. Identitytheft creates immediate financial hardship for victims, but it cango well beyond, potentially impacting a victim’s employment andhousing options, even their educational opportunities. The damagecan extend for years as victims’ personal data is bought and soldon illicit websites to any number of criminals. It’s difficult tomake someone whole again after such an intrusion, and monetarycompensation only addresses a portion of the person’s loss.

(Photo: iStock)

Coverage gaps in homeowners’ insurance

For more than 10 years, homeowners’ insurance carriers have offereda variety of coverage options to victims of identity theft, whichrange from expense reimbursement to expert assistance that helpsvictims recover their identities, to tools that monitor and detectfraud. Millions of Americans are already covered, or have access toservices, for free or at a significant discount, through theirinsurance company. But current coverage options don’t addressthe latest cybercrime techniques, leaving consumers on their ownwithout expertise or recourse.

Related: 7 homeowners trends for 2017

Most policies that cover identity theft are aligned with theFair Credit Reporting Act (FCRA) regulations,which shield consumers from fraudulent charges when their data isstolen. However, a growing number of cyber exposures don’t fallinto this category. Social media credentials stored in a stolensmartphone are not covered by FCRA or similar protections, forinstance.

Hackers may also attempt to use a pilfered device to executesocial engineering scams, which can include posing as a victim tosolicit money from relatives or trying to initiate an electronicfunds transfer, a transaction that isn’t covered by federalreimbursement laws.

Commercial insurers have already recognized the opportunity toaddress a business’s full-scale digital risk with fast growingcyber insurance offerings. Now these approacheshave been adapted for the home insurance market, enabling carriersto offer family cyber coverage.

(Photo: iStock)

Rethinking personal lines policy coverage for thedigital age

Policies that provide family cyber coverage can help pay for theextortion associated with ransomware and similar attacks.

Coverage to address system compromise is also gaining traction.It helps victims whose technology platforms have been attacked,either by a targeted hack or by malware, and who may needassistance restoring everything to working order. The forensicsconsulting that identifies the source of these exposures andoutlines solutions to close existing leaks may also be included incyber policies. These coverage options may also providereimbursement for technical assistance. With these updates,conventional personal lines coverage can provide adequateprotection for valuable digital assets.

Related: 10 things to do to keep hackers out of yourhome

Most people don’t know how to respond to cyber bullies, socialmedia hijackers or Internet trolls. Reputational coverage can actlike a personal advocate online, clearing away erroneous ornegative statements and restoring the victim’s control.

In 2017, the insurance market will see family cyber coveragebeing introduced for the first time that addresses issues such ascyber bullying and protection against online reputational damage.Carriers will be able to respond to these more complex risks,offering coverage, expert support and tools that make a real impacton victims’ lives.

In the cold world of cybercrime, technical savvy and the humantouch are essential components of the next generation of personallines coverage for these kinds of digital exposures.

Related: Keep employee data safe

Matt Cullina has 15 years of insurance industrymanagement, claims and product development experience. He is theCEO of Scottsdale, Ariz.-based CyberScout (formerlyIDT911), a consultative provider of identity and data riskmanagement, resolution and education services. Connect with him viaLinkedIn.