Ultimate Guide to Electronic Data Recovery Insurance

Everything you need to know about insuring your electronic data

This article on Electronic Data Recovery Coverage is part of our series on home and renters insurance.

Americans store a great deal of data on their electronic devices, from treasured family photos and videos to essential tax records and business files. Unfortunately, many don’t realize just how valuable that data is until it’s gone.

An unexpected event like a fire or power surge can happen in the blink of an eye and, all of a sudden, your stuff is inaccessible. The next bit of bad news is that hiring an expert to recover it can be pricey.

You can protect your files and your wallet by following data backup best practices and signing up for data recovery insurance coverage.

What is electronic data recovery insurance?

Electronic data recovery insurance is designed to help cover 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 kind of data should you be concerned about?

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 the 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 include anything that does not require physical component replacement, whereas physical failure is directly related to the mechanics of the storage.

Common instances would either be user error (manual deletion, improper use of software), electrical (power surge), or physical damage (failed internal components, dropped, fire, flood).”

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

Experts recommend the 3-2-1 rule: three copies of your data, 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 something that 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 an 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.”

These are the main factors that determine the cost of electronic data recovery:

  • The turn-around time desired
  • The number of hard drives damaged
  • The number of items to be recovered
  • 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)
  • If parts are required to rebuild the drive
  • The media 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 or how much it will cost until the situation is diagnosed. However, to give you a ballpark idea, here are some estimations.

One recovery company offers the following flat recovery costs for single hard disk drives with Windows and Mac file systems which are suffering from deleted data, a formatted drive, a virus-infected drive, a partially overwritten drive, or a logical corruption in the file system.

Note, these prices exclude data storage devices with physical failures. When you have 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 kind of insurance covers electronic data recovery?

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

Some companies may include coverage for data recovery up to a certain limit under the property portion of a standard policy. For example, Farmers Insurance will cover up to $1,000 of the data recovery costs for data (software, music, text, images, video, or audio) 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.

Would you like to compare home or renters insurance providers? 

Head over to SuperMoney’s review pages to view companies side-by-side. Compare their ratings and reviews to find the best provider and coverage for your needs.

Then, you can rest assured knowing your data will be safe in the unfortunate case of a covered loss.

Compare top home insurance providers.

Not a homeowner? Compare renters insurance companies here.