At the height of the Internet of Things, a new technology craze has thrown the insurance industry for another loop as “augmented reality” takes hold. On July 6, 2016, Pokémon Go, an interactive app-based game, is on pace to have more downloads than Twitter has users. This recent Pokémon Go phenomenon has been described as follows:

In simple terms, Pokémon Go uses your phone’s GPS and clock to detect where and when you are in the game and make Pokémon “appear” around you (on your phone screen) so you can go and catch them. As you move around, different and more types of Pokémon will appear depending on where you are and what time it is. The idea is to encourage you to travel around the real world to catch Pokémon in the game.

Pokémon Go uses technology generally referred to as augmented reality:

On the spectrum between virtual reality, which creates immersive, computer-generated environments, and the real world, augmented reality is closer to the real world. Augmented reality adds graphics, sounds, haptic feedback and smell to the natural world as it exists.

As seen with other technological developments, the consequences on the insurance industry are not entirely understood at this time. However, it is clear that this technology will impact the insurance industry in some manner, as we have already seen the following situations:

• Private Property Turned Into “Pokémon Gyms:” The Pokémon characters will gather at what the app refers to as a “Gym.” In the days since the release, a number of private property owners have found their property identified as “Gyms,” which results in a steady stream of players being sent to their private property. One homeowner has recently found his home, which was once a church building, the gathering place for a number of players. The homeowner notes “that the problems could easily lead to the value of his house going down and issues with his neighbours.”
• Bodily Injury to Players: While the dangers of having people looking at their phones as they move through city streets is easily seen, a number of reports indicate that criminals are using the game to commit their crimes. On the evening of July 9, 2016, police in O’Fallon, Mo. received reports that criminals were using the app by adding “a beacon to a PokeStop” that brought more players to the area. Reports indicate a number of armed robberies took place near this beacon.
• Malware Spreading Through App: As expected, hackers have already attempted to capitalize on the popularity of this app. In the few short days since the app has been available there have been a number of reports that phones are downloading compromised versions of the app which could allow unauthorized access to the users’ phones.

Insureds have only been able to download Pokémon Go for less than a week and this technology has already made an impact that should get the insurance industries’ attention. This technology, which has caught many people completely off guard, has already shown the potential to cause damage to private property, cause bodily injury and provide hackers access to insureds’ devices. Therefore, even if Pokémon Go does not have a significant impact to the insurance industry, this app is a good indicator of the technology advances to come.

The post Pokémon Go Provides Opportunity for Insurers to Start Considering New Technology appeared first on Privacy Risk Report.

There has been significant discussion since 2015 on how the “internet of things” is expected to impact our daily life, including our homes. In general, the term “internet of things” (IoT) refers to a network of “smart” devices found in the typical home that collect and exchange data over the internet. However, despite the risks posed by the IoT and the integration of technology into our homes, there has been little discussion of  insurance policies that are available to homeowners or renters to provide coverage for these claims.

In 2016, the IoT became an emerging issue for cyber security claims under first-party insurance policies:

As the IoT becomes more ingrained in our homes and business, we can expect insurance coverage issues to continue to flourish. The vast majority of these issues caused by the IoT will raise questions under first-party insurance policies. Consequently, we anticipate cyber security and first-party insurance coverage to be an emerging trend in 2016.

In addition to issues caused by the IoT, homeowners and renters face many of the same risks corporations and governments face including malware attacks, online fraud and data breaches of valuable information. It is also clear that hackers are no longer focused solely on large corporate and government targets. Less sophisticated hackers will search for smaller and less sophisticated targets, finding a windfall in homes and residences.

These recent developments in cyber security make the idea of having personal cyber insurance valuable to homeowners and renters. Therefore, it was only a matter of time before insurers started to market cyber coverage directly to homeowners and renters.

On June 14, 2016, Hartford Steam Boiler Inspection and Insurance Company (HSB) announced that it was offering what it billed as “the first personal lines cyber insurance program for consumers.” This new product is offered to homeowners and renters, along with family members living in the household, to protect against a variety of issues generally related to cyber security. In particular, HSB’s press release states its new “Home Cyber Coverage” policy provides homeowners with the following coverage:

• “Computer Attack to remove malware and reprogram computers and tablets, Wi-Fi routers or other Internet access points.”
• “Home Systems Attack restores devices connected to the Internet, including smart phones, thermostats, smart appliances and security and monitoring systems.”
• “Cyber Extortion with professional assistance on how to respond to a ransomware attack and payment of ransom when approved.”
• “Data Breach including forensic IT and legal reviews, notification and recovery services when private non-business data entrusted to an individual is lost, stolen or published.
• “Online Fraud for losses due to identity theft, phishing schemes, illegal bank and credit card transfers, forgery, counterfeit currency, and other deceptions.”

The HSB policy does not provide coverage for cyber bullying, but other insurers have been offering this coverage to homeowners.

While the IoT has received substantial publicity recently, discussion about these claims and insurance for these claims will likely go through a similar evolution as was the case with cyber insurance for corporate and governmental bodies. Homeowners will likely question whether cyber insurance is valuable until eventually concluding that this coverage has merit. As this evolution takes place, homeowners and renters are likely to see more cyber coverage products developed in this market space in the coming years.

The post Home Is Where the Hacker Is: Cyber Coverage Becoming Necessary for Homeowners appeared first on Privacy Risk Report.