Identity theft continues to rise, with over 1.1 million reported cases in the previous year. While many wonder if identity theft insurance is necessary, this guide will help you understand what it covers, its limitations, and whether it’s a smart investment for your situation.

What Does Identity Theft Insurance Cover?

Identity theft insurance primarily covers the expenses that come with restoring your identity, including:

• Legal fees
• Lost wages from time taken off work
• Notary and certified mailing costs
• Credit report fees
• Loan reapplication fees
• Case management services

Important Note: This insurance typically doesn’t reimburse you for stolen money or direct financial losses. Those are usually covered by your bank or credit card’s fraud protection.

Key Benefits of Identity Theft Insurance

1. Professional Support

• Access to fraud specialists
• Help with paperwork and documentation
• Guidance through the recovery process

2. Time Savings

• Dedicated case managers
• Assistance with creditor notifications
• Help with police reports and legal documents

3. Financial Protection

• Coverage for recovery-related expenses
• Reimbursement for lost wages
• Payment for legal consultation

Average Costs and Coverage Limits

Most identity theft insurance policies cost between $10-30 per month and typically provide:

• $25,000 to $1 million in expense coverage
• Credit monitoring services
• Recovery assistance

Do You Need Identity Theft Insurance?

Consider these factors when deciding:

✓ Do you frequently shop online? ✓ Have you experienced data breaches? ✓ Do you have complex financial accounts? ✓ Is your personal information publicly available?

How to Choose the Right Policy

Look for these key features:

1. Comprehensive credit monitoring
2. Recovery assistance services
3. Lost wage reimbursement
4. Clear coverage limits
5. Fraud alert services

Steps to Protect Your Identity

Even with insurance, take these preventive measures:

• Monitor credit reports regularly
• Use strong, unique passwords
• Enable two-factor authentication
• Avoid unsecured WiFi networks
• Regularly review financial statements

Where to Get Identity Theft Insurance

You can obtain coverage through:

• Your existing homeowners insurance as an add-on
• Stand-alone identity theft insurance providers
• Credit monitoring services with insurance features
• Your bank or credit card provider