The 2017 data breach at credit monitoring agency Equifax left many people wondering if they need Identity Theft Insurance. 143 million personal records and 209,000 credit card numbers were accessed. Most adults in the US and a large number in Canada were affected. The main effects of the breach are:
- Someone could try to borrow money using a victim's name.
- If you're one of the credit card victims, someone could use your card number to buy stuff.
There are lots of things you can do to reduce the risk of being hit, such as putting a fraud alert of freezing your credit records, using a monitoring service to regularly check your credit record and taking action yourself to check your bank and credit card balances as frequently as possible.
(Note that monitoring credit records does not include checking for illegal use of your credit card unless specifically stated by the monitoring service).
You can get more information and tips about protecting yourself here.
But what about insurance? Here are the key things you need to know.
- Your homeowner's insurance policy may include a small amount of coverage for this risk.
- Identity theft insurance does not, as a general rule, cover you against the direct financial losses if someone misuses your credit card or takes out a loan in your name. These costs are usually borne by the bank or card company.
- The real purpose of ID theft insurance is to help meet the cost of straightening out all of the problems that flow from falling victim, such as restoring victims' identities and repairing credit reports, covering lost wages and paying attorney's fees.
- ID theft coverage can be issued either as a standalone policy or as an endorsement to your homeowner's insurance. It usually costs around $40 to $60 and covers expenses of up to $25,000.
Identity Theft Insurance won’t stop thieves, but if you fall victim it could ease the pain of putting things right. If you're thinking about getting this type of insurance, check your homeowner's policy first, then speak to us or your insurance agent/broker.
Leah Kendra is a Commercial Account Manager with Joyce, Jackman & Bell Insurors. You can read Leah's bio HERE.