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Will Insurance Pay for Data Recovery Services?

Will Insurance Pay for Data Recovery Services?

Data comes in many forms. For some, it is critical documents, records, or research. For others, it is priceless photos, videos, or projects. Regardless, storing and accessing valuable data as required is a modern convenience we take for granted. As a result, data loss can impact our personal and professional lives. However, sudden data loss does not have to become permanent. A data recovery service can often retrieve lost files.

Are Data Recovery Costs Insured?

Your insurance might provide financial assistance in the event of unforeseen expenses from a digital disaster. While coverage depends on the terms and conditions of your policy, several companies offer protection for catastrophic data loss.

Below, we explain the details of data recovery insurance, whether you want to file a claim or explore your options.

Overview of Data Recovery Insurance

Policies differ between insurance companies. Even customers of the same insurer can have varied coverage based on factors like location or risk profile. Different policies feature unique terms, limits, and deductibles. In most cases, policyholders can customize their coverage to meet specific preferences or safeguard against liabilities.

Data recovery insurance shares the same model. One provider extends optional data recovery coverage as part of their homeowners insurance. Another insurer might replace a failed storage device, but not cover expenses related to recovering the data on it. Other companies offer cyber insurance policies for businesses and cover the cost of data recovery in certain situations. Some insurers exclude data recovery from their coverage options altogether.

The following table and list reflect data recovery policies at the largest insurance companies.

Provider Type of Insurance Limits and Deductibles for Data Recovery
State Farm Personal and business cyber insurance Combined annual limit of $15,000 after a $500 per-occurrence deductible for personal. Call State Farm for more details on business policies.   
Allstate Optional homeowners insurance  Limit of $5,000.
Liberty Mutual None No coverage.
USAA Discounted Blink℠ personal cyber insurance Limits of $10,000, $50,000, and $100,000 available according to coverage. 
Farmers Insurance Personal cyber insurance and business liability insurance Contact a local Farmers agent for more information. 
Travelers None No coverage.
American Family Business cyber insurance Contact an American Family representative for further information. 
Nationwide None No coverage.
Chubb Discounted Blink℠ personal cyber insurance Limits of $10,000, $50,000, and $100,000 based on policy.
Progressive Business cyber insurance Speak with a local Progressive agent to learn more.
Allianz Business cyber insurance Contact Allianz Commercial experts for additional details.
The Hartford Business cyber insurance Contact The Hartford for more information.
ERIE None No coverage.
AAA None No coverage.
HUB International Business cyber insurance Contact HUB International for additional information.
Hiscox Electronic data loss insurance Contact Hiscox for specific policy details.
HSB Personal and business cyber insurance Contact HSB for further coverage details.
Blink℠ Personal cyber insurance Limits of $10,000, $50,000, and $100,000 depending on coverage.

State Farm

Personal: State Farm has personal cyber insurance policies that protect specific data loss scenarios. State Farm’s cyber attack policy can cover data recovery and system restoration expenses following a security incident. Policies are available to homeowners, renters, condo owners, and those responsible for an elderly parent. Coverage is subject to a combined annual limit of $15,000 after a per-occurrence deductible of $500.

Business: Business owners can also purchase cyber liability insurance from State Farm. Cyber liability insurance can cover data recovery under certain conditions.

Cost: Speak with a local State Farm agent for the best estimate.

Allstate

Personal: Allstate offers additional coverage alongside their standard homeowners insurance. One option covers the cost of recovering lost data on a personal computer. Policyholders with electronic data recovery have a $5,000 limit for these services.

Business: While Allstate provides data compromise coverage to business owners, it does not insure expenses related to data recovery.

Cost: Electronic data recovery from Allstate costs around $50 per month for personal coverage.

Liberty Mutual

Liberty Mutual does not insure against data loss, regardless of the scenario.

USAA

Personal: Policyholders with USAA can obtain data recovery insurance through Blink℠ at a discounted rate. Blink℠ offers comprehensive cyber coverage, including ransomware data recovery and device replacement.

Business: USAA does not have business cyber insurance policies for data recovery.

Cost: Premiums vary based on location and property.

Farmers Insurance

Personal: Farmers Insurance offers a range of optional coverage and services to homeowners with Cyber and Identity Shield protection. The extent of the coverage depends on the state and specific policy but could involve payment for recovery services.

Business: Farmers has business liability insurance covering data recovery costs after a cyberattack.

Cost: Contact a local Farmers agent for the most accurate quote.

Travelers

While Travelers provides technical support as part of their cyber insurance, they do not cover the cost of data retrieval.

American Family

Personal: American Family does not cover recovery expenses for personal policyholders.

Business: American Family Insurance’s cyber coverage can include recovery expenses after a data breach.

Cost: Call an American Family agent to learn about specific cyber insurance options.

Nationwide

Nationwide does not provide any policies that cover data recovery costs.

Chubb

Personal: Chubb offers discounted personal cyber insurance through its Blink℠ brand. Blink℠ simplifies coverage and gives consumers customizable options, including affordable data recovery insurance. Their policies feature generous limits of $10,000, $50,000, and $100,000.

Business: Chubb’s cyber insurance policy provides first-party coverage to companies that need to recover data after an attack.

Cost: Location, property, and other factors determine premiums.

Progressive

Personal: Progressive does not cover recovery services for personal policyholders who experience data loss.

Business: Progressive offers business policies that include cyber coverage and insurance for data recovery expenses. The coverage can pay the cost of a service to restore data after a cyberattack.

Cost: Speak with an expert at Progressive for a detailed quote.

Allianz

Personal: Allianz does not offer personal cyber insurance policies with data recovery coverage.

Business: Allianz Commercial can insure corporations and small and medium-sized enterprises against data loss from a cyberattack. The Allianz Cyber Centre of Competence responds to real-time incidents and coordinates recovery efforts.

Cost: Contact an Allianz Commercial expert for additional information on cyber insurance policies.

The Hartford

Personal: The Hartford does not offer recovery insurance as part of its personal liability or property policies.

Business: The Hartford can provide businesses with cyber insurance that covers data recovery costs following an attack.

Cost: Call The Hartford for more info on coverage options and a quote.

ERIE

ERIE’s insurance does not include the cost of recovery services following a data breach or catastrophic failure.

AAA

AAA does not have coverage options for data recovery.

HUB International

Personal: HUB International does not offer private insurance that covers data recovery.

Business: HUB International partners with businesses of all sizes to deliver insurance policies and risk management. The brokerage’s cyber insurance can cover the expenses of recovering data from an infected device or system.

Cost: Contact a local HUB office to learn more about their cyber coverage.

Hiscox

Personal: Hiscox does not offer personal insurance policies.

Business: Hiscox specializes in insuring unique markets or services. Their property and casualty insurance can help protect against non-predictable data loss. The provider covers the cost to restore, repair, or replace data.

Cost: Hiscox’s electronic data loss insurance costs about $66 monthly.

HSB

Personal: HSB has personal cyber protection policies that cover recovery services.

Business: HSB offers cyber insurance to small and mid-sized companies. Their Cyber Suite program bundles liability insurance and recovery expenses.

Cost: Connect with an HSB expert for more information about personal lines and Cyber Suite.

Blink℠

Personal: Blink℠ by Chubb allows customers to tailor their benefits and coverage to meet their needs. As a result, Blink℠ cyber insurance features several data recovery options, including $10,000, $50,000, and $100,000 limits.

Business: Blink℠ by Chubb does not provide business policies.

Cost: Blink℠ offers three plans. Essential costs $5.28 per month and covers $10,000 in expenses. Premium costs $11.55 monthly and pays up to $50,000 for data recovery. The Works costs $18.67 per month but has a $100,000 limit.

Steps To Understand Your Coverage

While the above table and list provide an overview of data recovery insurance, it does not outline every option. Coverage will ultimately depend on your particular policy. Follow these steps to determine if your insurer will cover the costs of recovering lost data.

Step 1: Review Insurance Policy

Generally, data recovery is limited to business and cyber insurance policyholders. Sometimes, optional homeowners insurance may cover these services. However, that is the exception, not the rule.

If you have business or cyber insurance, begin by reviewing your policy. Your provider will supply these documents upon purchase of the policy, but they often offer online access.

Policies can contain complex language. Despite that, it is important to familiarize yourself with technical terms. Understanding your coverage can lead to better decision-making.

For starters, you want to locate the section related to data recovery. Each insurer defines data loss differently. That definition could determine your eligibility for data recovery services or file repair.

From there, see what events trigger coverage and approved procedures. Typically, these policies have a deductible, limit, or both. The deductible represents the amount you must pay before insurance assumes the remaining costs up to the stated limit. The stated limit refers to the maximum amount the insurer will cover. Exceeding limits can result in additional expenses.

Companies can also require policyholders to satisfy certain conditions for coverage. That could mean proving cybersecurity measures were in place or reporting the incident within a specified timeframe.

Step 2: Contact Provider for Clarification

Contact your agent or insurer if something needs to be clarified. If you cannot reach your agent, call customer service or open an online chat through their website.

The representative will clarify legal jargon and discuss your policy in simpler language. Understanding coverage details can reduce the stress of data loss, set realistic expectations, and inform planning.

Step 3: Note Limitations and Exclusions

Every policy has limitations and exclusions. Identify these gaps within your insurance. Limitations restrict the scope of coverage by capping the amount the provider will pay to recover data. In most cases, insurers will also exclude data loss cases involving hardware failure or human error. This knowledge is useful when filing a claim or changing policies.

8 Tips for Working with Insurance Companies

Picture showing a service representative speaking with a customer.

The claims process can be frustrating even if you are insured. You will have to provide information to the adjuster. After submitting the claim, you are still subject to denials or delays. Patience and persistence are valuable qualities throughout these periods. Here are eight tips for maintaining clear communication with insurance companies:

1. Record the data loss scenario.

Write down what happened as soon as data loss occurs. Include notable events that could have contributed to data loss, like an infection from malicious software. Businesses should catalog the affected data and estimate the impact of those files. Detail the immediate actions taken after noticing damaged or lost data.

2. Collect policy information.

Gather relevant documents. Have your policy number and other information available so your provider can locate the account and examine your coverage.

3. Create a list of questions and concerns.

Compile your most pressing questions and concerns before connecting with the insurance company. Be specific about aspects of your coverage you want clarified, such as conditions, deductibles, and limits.

4. Contact the insurer to report the incident.

Most providers have prompt reporting requirements. Starting the claims process as soon as you have everything prepared is recommended.

5. Document conversations with the provider.

Keep a record of all conversations with the insurer, including names of people, dates, times, and issues discussed. These notes could be helpful evidence or references later.

6. Request written communication.

To avoid confusion, ask for written communication as well. These could be emails or letters, but having decisions and details in writing can prevent potential disputes.

7. Follow claim procedures.

Each provider has unique claim procedures. Follow their guidelines to ensure the smoothest possible process.

8. Check with the insurer for updates.

Reducing downtime after data loss can be crucial. Being polite and persistent regarding updates can expedite the claim.

Consult Our Data Recovery Experts

Our team at Secure Data Recovery understands the emotional and financial effects of data loss. We proudly serve as your partner and work with your insurance company. Often, inaccessible files are irreplaceable, making quick recoveries or repairs even more essential.

We provide professional data recovery regardless of your storage device, coverage, or insurer. Our engineers have seen every failure scenario and resolved over 100,000 cases since 2007. In that time, we have maintained a 96% success rate and returned billions of critical files to satisfied customers. And we have the expertise, experience, and equipment to recover your data.

As part of our standard services, we offer free diagnostics and a No Data, No Recovery Fee guarantee. You either get your data back, or pay nothing.

Call us at 800-388-1266 to speak with a data recovery specialist and start your case.

Article by

T.J. Burlee is a content writer for Secure Data Recovery Services. He specializes in various topics in the data industry, including data recovery technology, storage devices, and digital forensics. Throughout his career, he has covered complex concepts and provided accessible solutions for users. Before joining Secure Data, he worked as a freelance technical writer.

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