Cyber insurance claims: How to file one and what to expect (2025)

What are cyber insurance claims?

A cyber insurance claim is a formal notice submitted to an insurer after an individual experiences a digital incident resulting in financial loss, identity theft or misuse, or damage to personal accounts or devices. The claim is not a remedy in itself. You can think of it as an administrative trigger that allows the insurer to evaluate the event, verify coverage, determine obligations, and initiate any recovery services included in the policy.

What are the most common cyber insurance claims?

The nature of cybercrime has changed significantly over the past few years. Criminals now use familiar brands, real-time communication, and personal data to make their schemes convincing and more sophisticated than ever. Below are the most frequent examples of cyber insurance claims affecting individuals today.

Ransomware attacks

Ransomware, once aimed almost exclusively at businesses, now affects individuals whose devices store years of documents, tax records, and other types of personal data like photos or notes. These attacks often begin with an email prompting a routine action, say, a shipping update or a request to view a scanned file, and end with an encrypted device whether that is your computer, laptop, or mobile device. Claims related to ransomware typically focus on the cost of removing the malware, restoring the system, and recovering data if possible. These situations align with protections offered through cyberattack coverage, which addresses unauthorized access and malicious activity affecting personal devices.

Business email compromise (BEC)

Email-based fraud remains one of the most persistent triggers of cyber insurance claims. In these schemes, criminals impersonate financial institutions, government agencies, or familiar brands with extremely sophisticated accuracy. A message about an overdue invoice or a blocked account can redirect payments to an attacker’s wallet or trick someone into revealing their credentials. These incidents usually escalate into broader cyber incidents, with attackers attempting access to additional accounts once the initial breach succeeds. Claims related to these events often involve identifying unauthorized access, documenting fraudulent activity, and addressing any resulting financial losses or identity theft, fraud, or misuse.

Funds transfer fraud (FTF)

Unauthorized transfers through banks, payment apps, or digital wallets are among the most common triggers for individual cyber insurance claims. Like in a lot of other types of scams, criminals during the fund transfer fraud usually impersonate institutions, spoof communications, or manipulate victims into sending money under false pretenses. Claims arising from these incidents often intersect with protections similar to online fraud coverage, which addresses digital deception leading to financial loss.

Data breaches

Data breaches remain a large driver of individual claims as well. Large scale breaches involving retailers, healthcare providers, financial institutions, and digital platforms frequently expose personal information. Criminals then use this data to open accounts, apply for loans, or engage in financial identity theft or other types of identity theft. Cyber insurance claims help fund identity restoration, credit correction, and the administrative work required to dispute fraudulent accounts.

Social engineering scams

Romance scams, marketplace fraud, impersonation attempts, and other forms of online scams cause individuals to disclose sensitive information or send money under deceptive circumstances. When these events involve misuse of credentials or unauthorized access, they fall within the claims landscape.

What is covered under cyber insurance claims?

Coverage varies by provider, but most personal cyber insurance policies include financial reimbursement and access to specialized support services.

First-party coverage

First-party benefits protect the individual directly affected by the incident. These often include:

• Reimbursement for stolen funds, including unauthorized transfers and fraudulent payment-app activity.
• Expenses associated with identity restoration, such as disputing new accounts, correcting credit reports, or replacing government-issued documents.
• Device remediation, including the removal of malware or ransomware, system restoration, and data recovery where feasible.
• Monitoring and alert services when personal information has been exposed.
• Access to specialists through programs equivalent to identity theft recovery, who handle communication with lenders, agencies, and institutions during the restoration process.

Individuals who want ongoing monitoring and protection may supplement their coverage with an identity theft protection service such as NordProtect, which provides proactive alerts along with preventive tools.

Third-party coverage

Some policies include benefits when an individual’s compromised device or account harms someone else. This may involve:

• Legal assistance if a hijacked personal email is used to distribute malware
• Support for disputes arising from impersonation originating from the victim’s account
• Limited coverage for associated expenses depending on policy terms

These situations are less common for individuals but remain part of certain personal cyber insurance offerings.

What isn't covered by cyber insurance?

The growth of the cyber insurance market has expanded consumer protection, but policies still have boundaries. Understanding these exclusions prevents misunderstanding during the claims process.

• Losses related to investment fraud without a digital compromise.  Situations where someone willingly transfers money to a fraudulent investment scheme are rarely covered. Insurers also draw strict lines around payments made after knowingly ignoring security warnings or bypassing established verification steps. If a bank has already flagged a transaction as suspicious and the consumer proceeds anyway, coverage may be limited or denied.
• Physical damage unrelated to malware. Hardware failure or accidental damage typically falls outside cyber insurance coverage. Similarly, policies often exclude harm arising from long-standing vulnerabilities, unsupported devices, or policy exclusions explicitly listing outdated software. Individuals relying on old operating systems or neglected devices may find coverage constrained as well.
• Cryptocurrency fraud. Because digital wallets used for crypto function outside traditional banking systems, coverage depends on the specific terms of the policy. Some include it while many do not. 
• Online harassment or defamation. It goes without saying that defamation or online abuse can be emotionally devastating. However, these issues usually don’t fall under the scope of standard cyber insurance unless a policy specifically incorporates related protections.

How can you file a cyber insurance claim?

The claims process begins as soon as an individual recognizes a potential cyber incident. Quick reporting is essential because it preserves evidence, establishes a clear timeline, and allows the insurer to begin its review. Here's a quick overview of how to file a cyber insurance claim.

• Notify the insurer. As soon as unauthorized charges, unfamiliar accounts, device lockouts, or data misuse indicators occur, contact the insurer’s claims department. Early communication provides the foundation for evaluating the event.
• Secure accounts and devices. Update passwords, enable multi-factor authentication, review account activity, and notify relevant financial institutions. If personal information has been used fraudulently, freezing credit may be necessary. Structured guidance on steps to take appears in resources such as what to do if your identity is stolen, which outline immediate actions tied to identity compromise.
• Gather documentation. Claims require evidence. Save screenshots of suspicious messages, transaction records, bank statements, device alerts, breach notifications, and any correspondence from institutions acknowledging the issue. Organized documentation supports the insurer’s investigation.
• Submit the formal claim. This typically involves a written description of the incident, supporting evidence, and details about steps already taken. Depending on the event, insurers may request additional documents or connect the policyholder with specialists in identity restoration, fraud remediation, or cyber extortion related analysis.
• Work with assigned specialists. Identity recovery professionals or device remediation teams may assist with resetting accounts, disputing fraudulent activity, or repairing affected systems. Claims involving misuse of sensitive information may also trigger ongoing monitoring services.
• Resolution and reimbursement. Once the insurer completes its review, it determines coverage and reimburses eligible losses. Identity-restoration services may continue beyond the reimbursement stage if the incident has ongoing implications.

Tips for maximizing your cyber insurance claim payout

The strongest claims tend to share a few characteristics. Individuals who keep detailed records, act in a timely manner, follow security recommendations, and maintain up-to-date protections have a smoother path through the claims process. These actions demonstrate care and reduce ambiguity, allowing insurers to validate incidents with less friction.

Reporting suspicious activity immediately — whether it’s a suspicious email, unusual bank transaction, or unexplained login — helps preserve evidence and limits the spread of the incident. Insurers often coordinate directly with financial institutions, and early reporting strengthens both the claim and the recovery. Maintaining secure habits such as offline backups of important files, updated security software, and regular account monitoring also helps prevent disputes about preventability.

Understanding the structure of your policy before an incident takes place can prevent disappointment later. Coverage limits, deductibles, waiting periods, and sublimits for specific events such as business interruption stemming from a cyber incident should be reviewed periodically. Policies that include an extended reporting period allow individuals more time to recognize and report losses that surface later.

Common reasons for cyber insurance claim denials

Cyber insurance claim denials often stem from preventable issues such as delayed reporting, insufficient documentation, failure to use basic security measures, or incidents that fall outside the policy’s scope. If a consumer ignores a bank warning, bypasses security protocols, or delays notifying the insurer, the case becomes more difficult to substantiate. Incidents arising from unsupported devices or outdated software may also be excluded if the policy requires maintained security standards.

A denial does not always reflect the insurer’s reluctance. Sometimes it reflects the challenge of validating events that occurred without adequate records or timely reporting. Awareness of these pitfalls helps individuals avoid them.

Real-world cyber insurance claim examples

The $400,000 real estate scam. A Silicon Valley executive fell victim to a sophisticated wire fraud scam during a home purchase. Hackers, having compromised the real estate agent's email account, monitored the transaction details and sent spoofed wiring instructions at the closing moment. The executive wired nearly $400,000 to the fraudsters. While this case highlights the devastation of such attacks, personal cyber insurance with "funds transfer fraud" endorsements is designed specifically to reimburse these life-altering losses. 

Source: NBC 4 News / RiskPoint Insurance

The millennial homebuyer's loss, In a similar case of wire fraud, a couple lost their $32,430 down payment after receiving a fraudulent email that appeared to be from their title company. The email arrived just as they were expecting payment instructions, a hallmark of email account compromise (EAC) where hackers wait for the perfect moment to strike. 

Source: Business Insider

Family identity theft. In a chilling example of identity fraud, a 38-year-old woman discovered that her credit was ruined not by strangers, but by her own mother, who had been using her daughter's identity for over 20 years to open credit cards and incur debt. This complex case illustrates the necessity of identity restoration coverage, which pays for the legal and administrative heavy lifting required to untangle decades of fraudulent history. 

Source: NexTier Bank