What is Personal Cyber Insurance?

​How Does Personal Cyber Insurance Work?Broadly speaking, a personal cyber insurance policy will provide 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 cyberattacks 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 will generally cover expenses fitting under three categorizations: 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 cyberbullying, or attacks against the integrity of your home systems. For example, if cyberbullying results in the wrongful loss of their job, this feature would cover lost salary up to policy limits.
If a cyberattack results in people being unable to access their home or needing to replace an electronic device, the coverage will ensure they're reimbursed for the costs associated with resolving the event.
Cyber Extortion CoverageCyber 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. Not only that, but 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 CoverageCoverage 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 cybersecurity threats.
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 only available as add-on coverage from 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-onState 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 will be 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. This type of protection is a more common offering from major homeowners insurance companies, often called identity theft coverage.

High-Value Home Personal Cyber Insurance Comparison: Chubb, AIG and PUREThree 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 and can be priced from as little as $127 per year to over $1,500, depending on the amount and type of coverage selected.
InsurerCyber damage coverage types offeredAnnual premiumChubbExtortion, financial loss and personal protection$577
AIGExtortion, data restoration, crisis management and cyberbullying$1,626
PUREExtortion, fraud and attacks$625
Premiums are based on company state filings for the endorsements, including $250,000 in total personal cyber threat coverage.Insurers define their coverage in different ways, so these add-ons are not directly comparable. However, we've elaborated on the exact type of coverage offered by the insurers below.
Chubb Cyber Insurance: Broad Protection with Some Scope to CustomizeChubb cyber insurance, available as an add-on to the Chubb Masterpiece homeowners insurance policy, offers protection for three categorizations of cyber events at five different levels of limits, allowing its policyholders to adjust coverage as they see fit. The customizability gives homeowners 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 limitCyber financial loss coverage limitCyber personal protection coverage limitMax limit for all covered events per policy periodPremium$5,000$25,000$25,000$25,000$127
$10,000$50,000$50,000$50,000$200
$15,000$100,000$100,000$100,000$316
$25,000$150,000$150,000$150,000$421
$25,000$250,000$250,000$250,000$577Chubb defines the coverage provided by its three categorizations of cyber threats as follows:

• Cyber extortion: Covers the cost of cyberattacks 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 will cover 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 costs of being held in custody, up to policy limits.
AIG Cyber Insurance: Cyber Coverage Customized to Your NeedsAIG offers cyber insurance as an add-on to homeowners insurance through the AIG Private Client Group, the company arm focused on 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 typePremium with $50,000 limitPremium with $100,000 limitPremium with $250,000 limitCyber extortion$27$50$97
Data restoration$149$277$532
Crisis management$230$426$820
Cyberbullying$27$50$97
Identity monitoring services$80$80$80
Total premium$513$883$1,626
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 $433 per year. But they can also select different limits for each category to balance coverage and price, and their final cyber insurance premium will be a sum of their coverage for each category. Selecting maximum limits of $250,000 in each category would result in an annual premium of $1,546.
The bulk of the cost of Family CyberEdge is made up by data restoration and crisis management coverages, which combine to make up almost 90% of customer premiums if limits are held consistent across coverage types.
AIG defines the coverage provided by its four categorizations of cyber threats as follows:

• Cyber extortion: Reimbursement for money paid to terminate or end an extortion threat and for investigation into its cause.
• Cyberbullying: Expenses incurred from cyberbullying, 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 cyberattack or extortion.
• Data restoration: Expenses incurred by a service provider in recovering lost data after a cyberattack or extortion.

PURE Cyber Insurance: Extra High Limits for High Net-Worth Homeowners Concerned About Cyber ThreatsAll homeowners and renters insurance policyholders sold by PURE, an insurer catering to high-value clients, will be able to add a personal cyber insurance endorsement, called PURE Starling, to their policies. Coverage under this endorsement is split into three categorizations: cyberattack, cyber extortion and fraud.
But coverage levels for these individual categorizations can't be customized. With PURE, policyholders simply select between three overall limits: $100,000, $250,000 and $1 million. And cyberattack events will only ever be covered up to a $100,000 sub-limit.
Cyber coverage limitCyberattack sub-limitDeductiblePremium$100,000$100,000$500$250
$250,000$100,000$1,000$625
$1,000,000$100,000$1,000$2,500
Deductibles are fixed for each associated coverage limitThe maximum $1 million dollar limit, quadruple of the maximum for Chubb or AIG, makes PURE Starling unique among personal cyber insurance policies and a good fit for wealthy individuals who believe they are at risk of a major cybersecurity threat. But coverage at that level does require some actions to be taken by the policyholder. Those who select the highest limit will have to maintain an active cybersecurity monitoring service for their devices. This includes continuous monitoring of data exchange on the insured's smartphones, tablets and computers to enhance the individual's cybersecurity and preempt damaging cyber threats.
PURE defines the coverage provided by its three categorizations of cyber threats as follows:

• Cyber extortion: Professional assistance in handling an extortion threat and payments (with prior approval from PURE) in response to a threat.
• Cyberattack: Costs of restoring data and systems following unauthorized use, access or perpetration of malware attack on a qualifying electronic home device.
• Fraud: Costs of identity theft or unauthorized use of bank cards or checks perpetrated through a qualifying electronic home device.