Insurance for cryptocurrencies works like regular insurance, protecting you from unexpected events.
In 2021, thieves stole a whopping $14 billion worth of cryptocurrencies, way more than in 2020.
Unlike regular money, cryptocurrencies aren't backed by governments, so there's no safety net if your crypto gets stolen.
Some big crypto exchanges like Binance and Coinbase offer insurance, but it doesn't cover everything, especially if you lose your login details.
Binance created a special fund called SAFU to protect users' money, and it even covered a $40 million hack in 2019.
Crypto insurance can help if your crypto is stolen, but it won't help if you lose money due to the changing prices of cryptocurrencies or if you fall for a scam.
If a crypto exchange goes bankrupt, insurance might not be much help, so it's smart to use a wallet where you control the keys.
Companies like Lloyd's and Relm Insurance are starting to offer insurance for cryptocurrencies.
BitGo has a $250 million policy to cover various crypto risks, backed by Lloyd's Syndicate.
Lloyd's also has a unique policy to protect online wallets from theft.