What is identity theft?
![Young woman working on a laptop sitting on the bed in the house.]()
Identity theft happens when an unauthorized person illegally gains access to your personal information. It is the process of collecting it with the intent of extortion, fraud, and theft. Common things targeted by thieves include your computer passwords, social insurance numbers, credit cards, bank account information, driver’s licence, passport, and other financial assets.
Signs your identity has been compromised
The unfortunate thing about being a victim of identity theft is you often don’t find out until it is too late. You could receive your credit card statement with hundreds or thousands of dollars in unauthorized charges. You could find important mail stops coming to your residence. You could receive approval for financial products you never applied for. There could be a sudden dip in your credit score. Or you could see email transfers going out of your bank account that you never sent. These are only some of the many ways you could be targeted.
It is a stressful situation. It takes a lot of time, resources, and effort to recover. Plus, there is the potential for financial loss. Identity theft insurance can help protect you in this situation.
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What is identity theft insurance?
Identity theft insurance provides financial protection for victims of identity theft. Coverage can vary by insurer but it helps to cover the costs of recovering after you’ve been a victim.
Rebuilding your credit and financial profile is challenging after fraudulent activity. This insurance supports you if your identity is compromised. It will help to cover some of the costs related to recovering personal identification documents, repairing credit scores, and getting compensated for lost financial resources. You can receive legal assistance and support from specialists to aid in your recovery process.
Identity theft insurance continues to become a more important form of protection as thieves increasingly target Canadians. There has been a noticeable increase in suspicious emails, phone calls, texts, and online activity. Most people have personal information online, providing cybercriminals with another opportunity to take advantage.
Failure to protect your personal information could put you in a compromising situation. Even if you take precautions, there is still a chance you could be a target. All criminals need is access to a few key pieces of your information such as your date of birth, address, SIN, or credit card number and they can gain access to your personal accounts and commit fraudulent activity.
Check with your insurer to see if you already have protection as part of your home insurance. Depending on your plan, your protection could be basic. In this case, you can add a fraud and identity theft insurance policy rider to your existing homeowner's plan.
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Do I need identity theft insurance?
Anyone could be a victim of identity theft. But when considering if you need this coverage, ask yourself if you are a good target. Some people are naturally bigger targets than others. For example, if you have a large online presence, own a business, are not tech savvy, or have weak passwords, you’re more likely to be targeted. But again, anyone can be a target. Getting identity theft insurance may not be able to prevent ID theft from happening, but it can make it a lot easier to recover from. Speak with our brokers to discuss your needs for identity theft protection.
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How does identity theft insurance work?
Most homeowner policies include basic ID protection as part of comprehensive home insurance plans. But it's usually minimal.
When you add ID theft protection you’ll receive compensation to cover expenses related to recovering your identity. You will be assigned a specialist to help you work through the process. You will also receive credit monitoring services for a defined period after you open a claim. You can receive some compensation for financial loss related to your stolen identity.
You can add this safeguard as an endorsement to your existing policy. Most plans give you the choice to add anywhere from $10,000 to $50,000 worth of coverage. This will also extend to other family members living at your residence.
What does identity theft insurance cover?
ID theft insurance provides a variety of types of coverage and access to services to help you recover. Here is what is typically covered:
- Up to $50,000 in expenses to aid in identity recovery (varies by insurer)
- Fees for identity restoration specialists to help you through the recovery process
- Legal fees related to ID recovery
- Costs to replace documents - driver’s license, social insurance number, etc.
- bank, credit card, and lender fees associated with fraudulent financial activity
What does identity theft insurance not cover?
A common misconception about ID theft insurance is it’ll reimburse you for the money lost. Policies don’t usually cover money stolen or financial losses. For example, if someone fraudulently wire transferred $10,000 from an online bank account, your insurer would not replenish this lost money. But they will reimburse you for the costs to report and recover from the incident.
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