Ultimate Guide to Electronic Data Recovery Insurance

Everything you need to know about insuring your electronic data

Americans store a great deal of data on electronic devices. From treasured family photos to tax records and business files, we trust technology with all our essentials. Unfortunately, we often don’t realize just how valuable that data is until it’s gone.

When an unexpected event like a fire or power surge strikes, in the blink of an eye, your precious data can vanish from your reach. And unfortunately, hiring an expert to recover it can be pricey.

But you don’t have to live in fear. If you’re worried about your data, you can protect yourself by following data backup best practices — and protect your wallet with data recovery insurance coverage.

What is electronic data recovery insurance?

Electronic data recovery insurance covers the costs of recovering lost data. When you lose data due to a peril included in your policy, the insurance company will pay for the recovery up to your limit after you pay your deductible.

“Data loss can occur due to many different circumstances. Most commonly, there are either logical or physical failures. Common instances would either be user error, electrical, or physical damage.”

What data should you be protecting?

Here are some common types of data that people seek to recover:

  • Family photos.
  • Business records.
  • Home movies.
  • Music.
  • Videos.
  • Digital records of a person’s life.

How is data lost?

According to Jeremy Provchy, Operations Manager at Secure Data Inc., “Data loss can occur due to many different circumstances. Most commonly, there are either logical or physical failures.”

Logical failures occur when data is lost non-mechanically. This includes the inadvertent manual deletion of files, improper use of files, or damage incurred a virus. Data loss experts typically address these types of failures with IT support.

Physical failures occur when data is lost due to physical damage. This includes electrical damage (power surges), dropped machinery, fires, flooding, failed internal components, etc. Experts typically address these failures with the replacement or repair of physical components.

Many people are confident in their intermittent backup practices until a failure occurs. That’s when they realize that they didn’t do it often enough.

How can you prevent data loss?

Experts recommend the 3-2-1 rule: three copies of your data, with two on local devices and one off-site. The two on local devices often include one copy on a computer and one on an external hard drive. The one off-site copy is usually kept on a cloud backup service.

If your backup system fails, data recovery is the last resort.

How does the data recovery process work?

Provchy explains, “The first step in any data recovery situation is assessing the situation, or diagnosing the problem/condition of the media. Once that is determined, the expert will know if it is resolvable or not.

If it is something technologically possible, the next step is obtaining an image to work with. After the image is created, the file system must be read for errors. Any corruption must be addressed before extracting the data to another usable device.”

“Pricing can range from hundreds to thousands of dollars depending on the media type and scope of work.”

How much does electronic data recovery cost?

Figuring out if you need insurance coverage or not depends on how much your electronic data recovery will cost. Provchy says, “Pricing can range from hundreds to thousands of dollars depending on the media type and scope of work.”

The main factors which determine the cost of electronic data recovery are:

  • The turn-around time desired.
  • The number of hard drives damaged.
  • The number of items to recover.
  • The symptoms of the hard drive.
  • The storage capacity of the hard drive.
  • Previous attempts to recover the data.
  • The configuration of the hard drive(s).
  • The new parts (if any) needed to rebuild the drive.
  • The file type.
  • The need for additional research and development.

As Provchy explained, the expert you contact won’t know if it’s possible to recover your data, much less how much it will cost, until the situation is diagnosed. However, to give you a ballpark idea, here are some estimations.

Some companies offer flat fees for data recovery, whether it’s been deleted, overwritten, or virally infected. For a physical failure, the company says you can send the device in for a free analysis and recovery quote.

Another company says the typical cost to retrieve lost family photos due to a hard drive failure is between $600 and $1,200.

To find out how much your specific data recovery needs will cost, contact a few companies and get quotes.

What types of insurance cover electronic data recovery?

If you decide you’d like the peace of mind that comes with electronic data recovery insurance, many home and renters insurance policies offer this coverage. However, the coverage will vary from one provider to the next.

Some companies include data recovery under the property portion of a standard policy. For example, Farmers Insurance will cover up to $1,000 of your data recovery costs as part of its standard homeowner’s insurance plan.

Others will not include it as part of the standard plan but will offer a rider for it. For example, Allstate has an add-on policy that covers up to $5,000 for data recovery from a computer.

Each policy will have its specifications and exceptions, so it’s important to read the fine print when shopping for coverage.

Getting started

Ready to find out what your data recovery coverage options are for different home or renter’s insurers? Click here to view side-by-side comparisons of top home insurance providers. Or click here to compare renters insurance companies.

Shop around to find the best data recovery insurance policy to suit your needs. Then when disaster strikes, threatening to erase your precious memories, years of work, or vital paperwork, you’ll be ready.