What is crypto insurance and why do we need it? #CriptoNews

Insurance companies are cautiously entering the cryptocurrency market, offering limited coverage that addresses certain scenarios but not all. Cryptocurrency insurance typically covers virtual assets that are lost or stolen under specific conditions. For example, if the exchange where you stored your private keys is hacked and your funds are stolen, you may be covered—provided the exchange has a policy for such incidents.

However, if you store your private keys in a wallet not created or maintained by the exchange (also known as a non-custodial wallet), you might not be eligible for coverage. As of now, there are no insurance policies that protect consumers who hold and manage their private keys independently.

If a crypto exchange goes bankrupt, insurance provides minimal protection, as customers are usually last in line for any payouts. To better protect your funds, you could use a non-custodial wallet where you control the private keys. However, this approach places all the responsibility on you.