Consumer reliance on technology such as digital payments, QR codes, eCommerce and other online interactions has led to concerns with cybercrime, particularly identity theft and AI-assisted attacks.

Even so, a recent survey 1,000 U.S. households by Nationwide and Edelman Data & Intelligence reveals a disconnect between consumer awareness and action. Though 80 percent of respondents express concern about identity theft, only 16 percent report having identity theft insurance.

The survey found that 52 percent of consumers encounter threats through spam phone calls, while 47 percent report facing risks via personal email.

An estimated 41 percent have either been victims of identity theft or know someone who has, and 33 percent have been notified that their personal data was involved in a company’s data breach within the past year.

“Cybercrime poses a profound threat to U.S. consumers, as criminals’ methods and the technology available to them evolves and improves,” says Sarah Jacobs, Nationwide vice president of Personal Lines Product Development. “Identity…theft can devastate individuals financially and emotionally, leading to long-lasting repercussions that can hinder personal and professional opportunities. Consumers must take these threats seriously and work to safeguard their personal information and finances or insure against the possibility that their information is stolen.”

The survey found that complacency and misconceptions are leaving consumers vulnerable.

An overwhelming majority of respondents (77 percent) has accepted identity theft as a normal part of life.

Only 28 percent of those surveyed admitted they have never sought more information about cyber protection, due to misconceptions surrounding the cost and effectiveness of identity theft coverage.

The most common misconceptions are:

• 55 percent believe they need a separate policy for each family member.
• 49 percent are unaware of the potential damage identity theft can inflict on their credit score.
• 48 percent think hiring a lawyer is essential to recover their identity.
• 35 percent do not understand how long it takes for their credit score to recover after an incident.
• 33 percent are unsure about the duration required to recover from identity theft.

Of those surveyed without identity theft coverage, 43 percent perceive the service as too expensive.

Although cost is the top reason cited for forgoing coverage, almost half (45 percent) claim they would be willing to spend up to $24 a month.

“As examples of data breaches and identify theft become common, it’s understandable to see why consumers are becoming numb to this threat and accepting identity theft as a part of life,” says Rachel Bush, vice president of Technology Business Risk at Nationwide. “Given the increased risk, we need to break through the misconceptions surrounding identity theft coverage and emphasize that acting today is vital for protecting your financial future. Ignoring these risks can leave you vulnerable when you least expect it.”

The rise and misuse of generative AI and deepfakes has intensified consumer fears.

A majority (86 percent) of consumers are worried about AI-assisted identity theft, with 73 percent specifically concerned about the implications of AI-generated deepfakes.

The survey found that 92 percent of Baby Boomers and 86 percent of Gen X express anxiety over these emerging technological threats.

Millennials (81 percent) and Gen Z (76 percent) also report being concerned about the new threats associated with this technology.

According to the survey, 18 percent of respondents report they have been targeted by AI-generated deepfakes or know someone who has, highlighting the evolving nature of modern cybercrime.

“With the rapid evolution of AI-driven cybercrimes, now more than ever, consumers must take their security seriously,” said Jacobs. “I urge everyone to connect with their insurance agents to explore the protection options available to them. These professionals are here to help you navigate this complex landscape and ensure you have the safeguards in place. Once a cyberattack occurs, it will already be too late. Don’t wait to act.”

Consumers often invest in protecting valuable physical assets like cars and homes. However, as life becomes more digitally integrated, it is equally crucial to consider digital protections like identity theft insurance, according to Nationwide.

Cybercrime and AI-assisted attacks will only become more sophisticated, so it is critical for consumers to stay informed and take proactive measures to protect themselves. Identity theft coverage is not just an option—it is now essential, the insurer’s survey report stated.