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Is Identity Theft Coverage on Home Insurance Recommended?

Identity theft is a huge concern nowadays. Several major retailers have had their credit card system’s compromised recently leaving many people wondering how to protect themselves. You may not be aware that most home insurance carriers offer identity theft coverage. Find out if identity theft coverage is a good option for protecting yourself against this widespread crime.

What does home insurance usually cover when it comes to identity theft?

One thing to keep in mind is that home owner’s identity theft coverage is not a preventative coverage. In no way does it help prevent a loss. Identity Theft and Home InsuranceIt is only to help you clear your name. Once a thief has stolen your identity, you can file a claim. Not all home owner insurance coverage works exactly the same. I did look up a couple of popular insurance carriers and all of their coverage was similar. Basically they will help you with any fees associated with your loss up to a certain dollar amount, many stating $25,000 as their limit.

  • Cost of getting your credit report
  • Any fees for reapplying for loans or grants
  • Phone, postage, and shipping fees
  • Notary and filing fees for costs you incur to correct your identity and credit records
  • Legal fees resulting from identity fraud
  • Up to $1,000 for deductibles or service fees from financial institutions, not to exceed the coverage limit
  • Up to $5,000 combined for lost wages and child and elder care expenses, not to exceed the coverage limit

Could it really cost $25,000 to clear your name of identity theft?

I really do not have the authority to say no it could never happen. However, I do know it is not likely. According to a Federal Trade Commission study, over half of all victims did not have to pay any out-of-pocket expenses due to identity theft. Now your time is a different story. It can consume a lot of your time talking with different financial institutions to get results. And most home insurance coverage provides experts to work on your behalf. Now that might make the coverage worth it right there.

How much does identity theft coverage cost?

The cost of ID theft coverage is fairly minimal. Some companies charge a flat annual fee, for example $25. Meanwhile some others include it in their high-end policies, packaging it along with other coverage.

When can you add identity theft coverage to your policy?

Most insurance carriers only allow this coverage to be added at the time of your policy renewal. It is not often you see carriers allowing clients to add this coverage mid-term. It is best to ask your insurance agent when you can add this coverage.

Would I recommend identity theft coverage on home owner’s insurance?

Due to its low cost, it is a decent coverage to have handy. I would recommend it to seniors who are especially concerned with identity theft. I do think the average person can handle getting themselves back on track after an identity theft situation without the help of an insurance policy. This is a coverage I would let my clients know about so they can make an educated decision on their own as to whether they want it or not.

If you are concerned with your credit right now, you should check your credit report. offers a free credit report from each of the three credit reporting companies annually.

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