Question from an IIABNY member: I was meeting with a commercial insured yesterday and was talking to her about Computer Fraud and Funds Transfer Fraud coverage now available under a Crime bond. She then asked me if there is any coverage available for her personally under a homeowner’s policy. Identity Theft only covers the expense of having your identity stolen, money is usually only covered while at the insured’s residence so….my question-is there any coverage for someone personally?
Answer: There is a little bit of coverage built into the ISO HO-3. SECTION I – PROPERTY COVERAGES, C. Coverage C – Personal Property, 1. Covered Property states, “We cover personal property owned or used by an ‘insured’ while it is anywhere in the world.” I.C.3 states, “The special limit for each category shown below is the total limit for each loss for all property in that category. These special limits do not increase the Coverage C limit of liability…a. $200 on money…” Therefore, the policy provides up to $200 coverage on money. Nothing in I.C.4. Property Not Covered appears to exclude coverage for money off-premises.
In addition, I.E.6. Credit Card, Electronic Fund Transfer Card Or Access Device, Forgery And Counterfeit Money provides up to $500 coverage for loss resulting from theft or unauthorized use of an electronic fund transfer card or access devise used for deposit, withdrawal or transfer of funds, issued to or registered in an insured’s name. So, if the loss is due to someone taking and using the insured’s ATM card without permission, the insured has up to $500 coverage.
Obviously, these are not very large limits. There is an ISO endorsement available for increasing the amount of credit card and EFT card coverage, but it sounds like your client is more concerned with someone hacking into her bank account. I’m not aware of any personal lines coverage for that exposure. As you pointed out , the ISO identity fraud endorsement covers costs resulting from identity theft, not theft of money. Ultimately, the financial institution holding her funds should be legally responsible for a theft from their systems.