More Homeowners Adding Personal Cyber Coverage Over Rising Risk

Personal cyber coverage is more important today than ever.

According to the FBI, Americans experience around 4,000 ransomware attacks each day.

With personal cyber risks rising, more people are opting for personal cyber insurance, which protects against data breaches, online fraud, and even cyberbullying, among other internet-based crimes.

Historically, the industry has treated cyber risk as a form of identity theft: when your identity gets stolen online, you can make a claim through your homeowners insurance policy’s liability coverage, which typically covers fraud and identity theft.

Today, however, more homeowners and businesses are choosing personal cyber coverage to cover a wider range of risks.

Many insurers offer cyber coverage as an endorsement on an ordinary homeowners insurance policy.

Personal Cyber Risk Has Increased Significantly

According to Jeff Dunsavage at the Insurance Information Institute, personal cyber risk is up.

The rise of internet-connected devices in the home has increased risk significantly.

If a smart device in your home gets infected with malware, for example, it can cause disaster. Attackers can seize a homeowner’s data and extort the homeowner, for example.

Even if you don’t have smart devices in the home, you could be at risk of phishing scams. Phishing scams – including targeted attacks known as spear phishing – have become more common, putting homeowners at risk.

What Does Cyber Insurance Cover?

Many insurers now offer an endorsement to cover internet-related risks.

You add this endorsement to your homeowners insurance policy, and you get additional protection against cyber risks.

Some of the things covered by a typical cyber insurance endorsement include:

• Identity theft and data breaches: If you lose your identity documents or data in a cyberattack, then cyber insurance could cover the costs you incur trying to fix that damage.
• Cyber extortion: If someone steals your data, they may try to extort you – say, with ransomware or by holding your files hostage. Cyber insurance covers the cost of resolving cyber extortion incidents – say, by connecting you with security experts who can determine if the threat is credible. In many cases, cyber insurance even covers the cost of paying the ransom itself.
• Online fraud: If someone makes an illegal bank transfer using your identity, abuses your identity online, or commits other forms of fraud against you via the internet, then cyber insurance could cover the cost of remediating this damage.
• Cyberbullying: If someone causes damage to you or a member of your household via cyberbullying, then cyber insurance could cover costs related to that attack. If someone bullies your child online, for example, then cyber insurance could cover the cost of counseling, social media account monitoring services, and temporary relocation, among other costs.
• Deceptive transfer fraud: One of the most common types of cyberattacks is deceptive transfer fraud. If someone impersonates your grandson over email, for example, and convinces you to send $10,000 in crypto to an email address, then cyber insurance could help cover you for this loss.
• Other cyberattacks: Cyber insurance can cover general cyberattacks against you and other members of your household. If a virus infects your computer or smart device, for example, and causes damage, then cyber insurance could cover the cost of making you whole again after the loss.

Does Ordinary Insurance Cover Cyberattacks?

Homeowners insurance includes liability coverage. It also protects against certain types of fraud and financial losses.

However, ordinary insurance doesn’t protect against many types of cyberattacks – like losses related to malware, identity theft, or online fraud.

Ordinary homeowners insurance covers things like:

• Credit and debit card fraud
• Check forgery
• Counterfeit cash
• Fraud and identity theft
• Intentional and criminal deception

A standard homeowners insurance policy does not, however, cover expenses directly linked to a cyberattack. It won’t cover the cost of repairing a computer, replacing devices, paying ransoms for ransomware, or making you “whole” again after a cyberattack.

How Much Does Cyber Insurance Cost?

Cyber insurance is generally an affordable endorsement on a standard homeowners policy.

Typically, insurers charge around $3 to $10 per month extra for cyber insurance.

Cyber insurance is usually available as an endorsement – similar to things like guaranteed replacement cost coverage and watercraft endorsements.

If you’ve already made one or more claims against your cyber insurance policy, then you might pay higher premiums. Insurers may also offer different levels of protection.

Tips for Preventing Cyberattacks

Cyber insurance, like all insurance, works best when you never need to use it.

Some of the best ways to prevent cyberattacks include:

1. Set up two-factor authentication (2FA) across all accounts – especially banking, email, and social media accounts.
2. Avoid clicking suspicious links in texts or emails – even if they’re from known contacts. If a link seems suspicious, contact the person directly to verify that they sent the link.
3. Use complex, unique passwords for each account. To track passwords, use a mainstream password management system like LastPass.
4. Set up a separate Wi-Fi network at home for your smart devices. That way, if someone infiltrates a smart device, they won’t have access to your personal accounts or devices.
5. Install updates for all hardware and software as soon as they’re available. Many updates patch known exploits.

3 out of 4 Insurance Agents Have Offered Cyber Insurance to Homeowners in 2025

More insurers are offering cyber insurance.

As proof, Jeff Dunsavage of the Insurance Information Institute cites a report showing 77% of agents have offered personal cyber insurance options to homeowners in the early months of 2025.

However, there’s a gap between agents offering cyber insurance and homeowners actually buying cyber insurance. According to Dunsavage, “consumer adoption rates [of cyber insurance] continue to lag.” In other words, many homeowners don’t appear worried enough about cyberattacks to buy cyber insurance – at least not yet.