As India’s daily life becomes increasingly digital, cybercrime is emerging as one of the fastest-growing risks for individuals and families. From financial fraud and identity theft to data misuse and impersonation, cybercriminals are exploiting the country’s expanding online footprint with growing sophistication, prompting renewed focus on personal cyber insurance as a protective measure.
India’s digital ecosystem has seen rapid growth, driven by widespread smartphone adoption and the sharp rise in digital payments. According to data from the National Payments Corporation of India (NPCI), the Unified Payments Interface (UPI) processed 21.63 billion transactions worth ₹27.97 trillion in December 2025 alone, reflecting the scale at which Indians now rely on online platforms for everyday transactions.
However, the surge in digital activity has been accompanied by a steep rise in cyber fraud. Government data from the National Cyber Crime Reporting Portal (NCRP) and the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS) shows that cyber fraud losses jumped to ₹22,845.73 crore in 2024, up from ₹7,465.18 crore in 2023—a year-on-year increase of more than 200%. The figures highlight how cybercrime is no longer limited to isolated incidents but has become a systemic risk affecting a broad segment of the population.
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Why cyber insurance is gaining relevance
With cyber threats becoming both frequent and financially damaging, insurers and digital risk experts say cyber insurance is increasingly being viewed as a personal safety net, similar to health or motor insurance. Unlike traditional insurance products, cyber insurance focuses on risks linked to digital identity, online financial activity and data security.
Policies typically cover financial losses arising from identity theft, including unauthorised transactions and misuse of personal information. In cases of unauthorised access to bank accounts, credit cards, debit cards or digital wallets, cyber insurance can help compensate for direct monetary losses, while also covering legal expenses required to pursue action against cybercriminals.
Another key component is technical support and data restoration. Cyber incidents often involve compromised devices, deleted data or malware attacks. Cyber insurance policies may reimburse the cost of engaging IT specialists to investigate breaches, secure affected systems and restore lost data, helping users return to normal digital activity more quickly.
Beyond financial recovery
Industry experts note that cybercrime often has consequences beyond monetary loss. Victims of identity theft or online fraud frequently report stress, anxiety and a prolonged sense of vulnerability. As a result, some cyber insurance offerings now include psychological counselling support to address the emotional impact of cyber violations.
Loss of income is another growing concern. Identity theft can disrupt employment, banking access or freelance work, leading to temporary loss of wages. Certain cyber insurance policies compensate for income lost as a direct result of cyber incidents, helping affected individuals maintain financial stability during recovery.
Family coverage is also becoming more relevant as households share devices, payment methods and online accounts. Extending cyber protection to spouses and dependent children ensures that a single incident does not expose the entire household to financial or legal risk.
Data protection in a digital economy
The rising interest in cyber insurance coincides with broader discussions around data privacy and digital safety in India. As more services—from banking and healthcare to education and entertainment—move online, experts stress the importance of embedding data protection into everyday digital behaviour.
While cyber insurance cannot prevent cybercrime, it is increasingly being seen as a risk-mitigation tool that complements awareness, strong passwords, two-factor authentication and timely reporting of fraud. With cyber threats evolving faster than many users’ ability to respond, structured financial and technical support is becoming a key part of personal digital resilience.
As India continues its rapid digital expansion, the growing scale of cyber fraud suggests that individual-level protection will play an increasingly central role in how users safeguard their digital identities, finances and peace of mind.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
