What Is Personal Cyber Insurance? And How Can Homeowners Buy a Policy?

What Is Personal Cyber Insurance? And How Can Homeowners Buy a Policy?

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As technology has become increasingly integrated into people's lives, the risks that sensitive personal data could be compromised, including Social Security numbers and bank and credit card information, has continued to rise. And the theft of personal data can have financial consequences, with cyber crimes costing individuals over $5,300 on average in 2020.

One way to protect yourself financially against these risks is by buying a personal cyber insurance policy, part of a growing insurance market for cyber protection. For now, this market is in its infancy, but there are some ways consumers can get personal cyber insurance through their home insurance policies.

One major insurance company offering personal cyber insurance is State Farm. In recent years, the company upgraded its identity theft coverage to include protection from cyber extortions and cyber attacks. This coverage can be added to a State Farm homeowners insurance policy for just $25 per year.

In addition to State Farm, personal cyber insurance is offered as an endorsement from smaller insurers, such as Cincinnati Insurance, Acuity and Arbella, and high-value homeowners insurance policies from insurers like AIG, Chubb and PURE. These higher-value endorsements currently range in price from a few hundred dollars per year to over a thousand, with higher prices reflecting the broader protection and higher limits offered under these policies.

Should individuals buy personal cyber insurance?

Given the rise in frequency and cost of cyber crimes, individuals should consider purchasing some level of personal cyber insurance if their homeowners insurance provides the option. In 2020, the FBI's Internet Crime Complaint Center received almost 800,000 complaints of cyber crimes, with a total estimated cost of $4.2 billion. That comes out to an average cost of over $5,300 per cyber crime.

State Farm is a rare major insurer offering cyber insurance to individuals and their families as an add-on to its standard home insurance policies. Several smaller companies offer it as well, including some as part of high-value home insurance policies, which have target clients with home values approaching $1 million or more. Some other large insurers, like Allstate and Travelers, offer the option for a level of identity theft protection.

However, as the personal cyber insurance market continues to expand, more cyber policies with reasonable limits could be an affordable supplement to individuals' insurance coverage for this rising threat.

For example, State Farm's aforementioned personal cyber insurance endorsement covers $15,000 in combined cyber extortion and cyber attack damages for $25 per year. This endorsement, named Cyber Event, Identity Restoration and Fraud Loss Coverage, also covers policyholders for up to $50,000 for identity restoration expenses and fraud losses. This provides individuals with more than enough protection for the average cyber crime cost at an affordable price.

How does personal cyber insurance work?

Broadly speaking, a personal cyber insurance policy provides financial reimbursement for the costs associated with the theft of digital information and assets up to your policy's limits. But there are a variety of ways cyber attacks can result in a monetary loss, ranging from the theft of bank account funds to payments made after extortion through an anonymous online threat.

No two personal cyber insurance policies are exactly alike, but most generally cover expenses under at least three categories: personal and home protection, extortion and financial loss from fraud.

Cyber personal and home protection coverage (also called cyber attack coverage)

This coverage protects the policyholder against the financial consequences of personal online attacks, also called cyber bullying, or attacks against the integrity of your home systems. For example, if cyber bullying results in the wrongful loss of their job, this feature would cover lost salary up to policy limits.

If a cyber attack results in people being unable to access their home or needing to replace an electronic device, the coverage ensures that they're reimbursed for the costs associated with resolving the event.

Cyber extortion coverage

Cyber extortion is when online criminals threaten the release of sensitive personal data or prevent individuals' access to their technology devices in return for a ransom. A personal cyber insurance policy reimburses individuals for payments they made under the duress of an extortion threat. It may also cover the costs of conducting an investigation to diagnose the cause of the event and help prevent such an occurrence in the future.

Cyber financial loss from fraud coverage

Coverage for financial loss or fraud as a result of a cyber event can refer to a wide range of scenarios. These include identity theft, stolen bank funds or fraudulent use of credit cards or checks. Traditionally, this type of protection has been available as part of a standalone identity theft coverage policy, an identity theft endorsement for a homeowners insurance policy or identity theft resolution assistance through a credit card company. But identity theft coverage alone does not protect against the wider range of risks posed by cyber security threats.

Other types of coverage offered by various insurers include:

  • Data breach
  • Cyber bullying

Which insurance companies sell personal cyber insurance?

Although cyber insurance is a growing market, standalone personal cyber insurance policies have yet to gain traction. The most prominent insurer to offer comprehensive cyber protection is State Farm, with its Cyber Event, Identity Restoration and Fraud Loss coverage. This coverage can be purchased as an add-on to State Farm home insurance.

Otherwise, personal cyber insurance is available as add-on coverage from a set of smaller insurers that includes a select group of major insurers who sell high-value home insurance; in other words, insurance for those who have homes approaching $1 million in value or more.

State Farm personal cyber insurance: an accessible home insurance add-on

State Farm is the only major home insurance company to offer a personal cyber insurance add-on to its standard homeowners insurance policy, distinguishing itself from major competitors like Allstate and Liberty Mutual. The Cyber Event, Identity Restoration and Fraud Loss endorsement is not customizable, but it offers coverage up to limits of $15,000 or more — depending on the event — for only $25 per year.

Although identity restoration coverage is common among home insurance policies, few other major insurers offer affordable cyber attack and cyber extortion coverage as State Farm does.

Coverage offered by State Farm's personal cyber insurance endorsement…

  • Cyber attack: Pays for data recovery and system restoration costs that come as a result of a cyber attack. Consumers are covered for combined cyber attack and cyber extortion damages for up to $15,000 per year.
  • Cyber extortion: Pays for professional assistance from an expert to help mitigate a cyber extortion event, such as a perpetrator demanding money from someone before they can regain access to a device.
  • Identity restoration: Covers policyholders for up to $50,000 in expenses incurred to recover control of your identity and cover fraud loss. This type of protection, often called identity theft coverage, is a more common offering from major homeowners insurance companies.

Personal cyber insurance from smaller companies

Several regional insurers have sets of personal cyber offerings. Most are on the lower price range for coverage, charging $100 or less for various coverage limits.

Premium for $25,000 in coverage
Hanover Insurance$50$75$100
Central Insurance$50$65N/A
Cincinnati Insurance$21$42$66
Plymouth Rock$49$68N/A

Premiums are based on company state filings for the endorsements.

Central Insurance

Central Insurance, a smaller company based in Ohio, offers standalone cyber policies. They can be added to homeowners, renters and condominium policies, and they cover all members of a household. Coverage includes:

  • Computer/home systems attack
  • Cyber extortion
  • Online fraud
  • Data breach
  • Costs associated with being a victim of cyber bullying

Cincinnati Insurance

Cincinnati Insurance offers basic coverage for cyber extortion, cyber attack and online fraud. It also offers the option of up to $250,000 in protection for certain policyholders, including those with what it calls Executive or Capstone coverage.


Safety's coverage includes protection from data breaches, computer and home systems attack, cyber extortion and online fraud. Coverage limits top out at $50,000, with a $500 deductible.


In addition to many of the standard coverages, Arbella also offers data breach protection. That covers review from forensic IT or legal representation when personal data entrusted to a policyholder is stolen, lost or published.


Selective, which has multiple offices in the Northeast, says it provides cyber attack, cyber extortion, online fraud protection and identity theft coverage. It covers computers, tablets, smartphones and other connected technology.

Plymouth Rock

Plymouth Rock's coverage includes cyber attack, cyber extortion, online fraud, cyber bullying and data breach coverage.


A Wisconsin-based company, Acuity offers a full range of coverages that includes cyber protection legal expense and damages reimbursement. It can be added to a renters, condo or homeowners policy.

High-value home personal cyber insurance comparison: Chubb, AIG and PURE

Three notable insurers — AIG, Chubb and the Privilege Underwriters Reciprocal Exchange (PURE) — offer varying degrees of personal cyber insurance coverage as add-ons to their high-value homeowners policies. The costs of these endorsements are wide ranging, depending on the amount and type of coverage selected.

Cyber damage coverage types
Annual premium
ChubbExtortion, financial loss and personal protection$577
AIGExtortion, data restoration, crisis management and cyber bullying$1,652
PUREExtortion, fraud and attacks, cyber bullying$625

Premiums are based on company state filings for the endorsements, including $250,000 in total personal cyber threat coverage.

Insurers define their coverages in different ways, so these add-ons are not directly comparable. However, we elaborate on the exact types of coverages offered by the insurers below.

Chubb cyber insurance: broad protection with some scope to customize

Chubb has multiple cyber insurance offerings. An add-on to the Chubb Masterpiece homeowners insurance policy offers protection for three categories of cyber events at five different levels of limits, allowing policyholders to adjust coverage as they see fit. The company also offers a product called Blink, which is personal cyber protection.

On the homeowner side, the customizability gives policyholders the option to pay as little as $127 per year for coverage of up to $25,000 in damages. Conversely, more conservative homeowners concerned about the vulnerability of their personal data can get covered up to $250,000 in damages for $577 per year.

Cyber extortion coverage limit
Cyber financial loss coverage limit
Cyber personal protection coverage limit
Max limit for all covered events per policy period

Chubb defines the coverage provided by its three categories of cyber threats as follows:

  • Cyber extortion and ransomware: Covers the cost of cyber attacks involving threats to release personal information, cause failure to personal computer networks or restrict access to personal data.
  • Cyber financial loss: Reimburses policyholders for stolen account funds, fraudulent charges or lost salary while resolving your claim and attorney fees.
  • Cyber personal protection: Covers breaches of privacy, cyber bullying and cyber disruption, the latter referring to events that prevent you from accessing your home or interrupting a small business you run from your home.

As with other cyber insurance policies, Chubb covers policyholders for the consequences of the event and not just the event itself. For example, if cyber bullying results in your wrongful termination from work or a false arrest, you'll be covered for related expenses, such as foregone salary or the costs of being held in custody, up to policy limits.

Blink offers three levels of protection, all at modest rates. It covers many of the same things as Chubb's standard policy. However, it’s important to know that it does not cover losses linked to digital currencies.

Coverage limit
Monthly Premium

AIG cyber insurance: cyber coverage customized to your needs

AIG offers cyber insurance as an add-on to homeowners insurance through the AIG Private Client Group, which works with high-end properties. The add-on is called Family CyberEdge and offers four types of cyber protection, with coverage limits adjustable within each category to either $50,000, $100,000 or $250,000. AIG also includes identity monitoring services for a flat fee of $80 per person.

Coverage type
Premium with $50,000 limit
Premium with $100,000 limit
Premium with $250,000 limit
Cyber extortion$28$51$99
Data restoration$151$281$541
Crisis management$231$433$833
Cyber bullying$28$51$99
Identity monitoring services$80$80$80
Total premium$518$896$1,652

All premiums are for coverage with a $1,000 deductible.

Home insurance policyholders with the AIG Private Client Group can opt for the lowest coverage limits of $50,000 within each category and pay as low as $438 per year. But they can also select different limits for each category to balance coverage and price. Their final cyber insurance premium is a sum of their coverage for each category. Selecting maximum limits of $250,000 in each category would result in an annual premium of $1,572.

The bulk of the cost of Family CyberEdge is made up of data restoration and crisis management coverages, which comprise almost 90% of customer premiums if limits are held consistently across coverage types.

AIG defines the coverage provided by its four categories of cyber threats as follows:

  • Cyber extortion: Reimbursement for money paid to terminate or end an extortion threat and for investigation into its cause.
  • Cyber bullying: Expenses incurred from cyber bullying, ranging from psychiatric services to lost salary from wrongful termination.
  • Crisis management: Expenses incurred by a service provider to minimize the damage to the covered policyholder's reputation after a cyber attack or extortion.
  • Data restoration: Expenses incurred by a service provider in recovering lost data after a cyber attack or extortion.

PURE cyber insurance: extra high limits for high-net-worth homeowners concerned about cyber threats

All homeowners insurance policyholders sold by PURE, an insurer catering to high-value clients, can add a personal cyber insurance endorsement called PURE Starling to their policies. Coverage under this endorsement is split into five categories: online and offline fraud, data recovery and system restoration, cyber extortion, breach notification costs and third-party claims related to cybercrime.

But coverage levels for these individual categories can't be customized. With PURE, policyholders simply select between five overall limits: $100,000, $250,000, $500,000, $1 million and $2 million.

Fraud and cyber defense coverage limit
Data recovery and system restoration sub-limit
Breach notification costs sub-limit

Deductibles are fixed for each associated coverage limit.

The maximum $2 million limit, considerably higher than the maximum for Chubb or AIG, makes PURE Starling stand out among personal cyber insurance policies and a good fit for wealthy individuals who believe they are at risk of a major cyber security threat.

PURE defines the coverage provided by its five categories of cyber threats as follows:

  • Fraud and cyber crime: Costs of identity theft, unauthorized use of bank cards, phishing attacks or cyber attacks.
  • Cyber extortion: Professional assistance in handling an extortion threat and payments (with prior approval from PURE) in response to a threat.
  • Data recovery and system restoration: Reimburses the cost of data restoration after unauthorized use or a malware attack.
  • Breach notification costs: Covers costs resulting from a privacy breach. Can include attorney costs, IT professionals and mailing notification to affected parties.
  • Cyber protection third-party claims: Coverage for legal expenses and damages from lawsuits stemming from privacy breaches.

Sources: FBI 2020 Internet Crime Report

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