Advertising Disclaimer

Identity Theft Insurance Coverage

Identity theft insurance is often offered as standalone coverage or as additional coverage for homeowners insurance policies. Some insurance companies include identity theft coverage in their standard homeowners policies.

Read Time: 7 mins

Our team is devoted to helping homeowners make the right coverage choices. We adhere to strict editorial guidelines to maintain the accuracy and relevance of our content. This article may feature our affiliate partners who provide us with compensation; however, our reviews remain independently formed. For further details, please refer to our editorial policy.

Identity theft is a common crime committed in today’s world. Identity theft can be devastating to the victim and their family, potentially leading to some serious financial issues and possibly worse. Thankfully there is identity theft insurance available on the market today to help make financially whole a victim of this crime.

Something many people may not know though is that identity theft insurance may be included within their home insurance policy already and if not, it is usually available as additional coverage in the form of an endorsement or rider.

Compare home insurance quotes
Find cheap rates from the best providers in your area
Key facts
  • Identity theft insurance helps the insured pay the costs associated with reversing fraud, fixing their credit score, and getting their identity back.
  • Identity theft insurance does not reimburse the insured for monetary losses like a bank account being drained or a credit card being racked up. The bank or credit card company is usually responsible to make those instances right.
  • In many cases, identity theft insurance comes included in a homeowners insurance policy or can be added on as an endorsement or rider for a small fee.

What is identity theft insurance?

Identity theft insurance is a type of insurance coverage designed to help the insured person pay costs and fees associated with reversing fraud, fixing their credit score, getting their identity back, and securing their various accounts from future attacks. It is not insurance designed to reimburse the insured for the actual monetary losses incurred as a result of identity theft.

Here is an example of how identity theft insurance works. An insured has their identity stolen and the thief steals $1,000 from the insured’s bank account. The insured then has to pay for a credit report, notary fees, postage fees, and other fees to get their identity back and secured. In total these various fees cost $500. The identity theft insurance policy will reimburse the homeowner for the $500 of incurred fees to restore their identity but provides no protection for the $1,000 stolen out of the insured’s bank account. The victim would need to work with their bank to have the bank restore that $1,000 to their bank account.

Some renters insurance policies may also provide identity theft coverage or offer it as an add-on. If you are renting, this may be worthwhile to look into.

What does identity theft insurance cover?

Some examples of what identity theft coverage added on to your home insurance policy may cover are:

  • Paying for a consumer fraud specialist
  • Replacing various government-issued identification
  • Paying for attorney fees when taking the thief to court
  • Paying for resolution services that help to reclaim identity and credit score
  • Reimbursing administrative fees that may be incurred in this process
  • Credit monitoring

Reclaiming one’s identity after being stolen can be an arduous and expensive process. The overwhelming nature of dealing with one’s entire identity being ripped away from them and trying to regain it is bad enough, but the costs associated with regaining it can compound the overwhelming nature of it. Identity theft covers the costs to regain one’s identity to ease some of that stress and help the insured get back to their normal life.

Some policies will also cover lost wages during this time. Some policies may even reimburse the homeowner for the money that was stolen from a bank account although this is rare as banks are usually legally required to reimburse the victim already.

What is covered under an identity theft standalone policy or add-on to a homeowners policy can vary from insurer to insurer. It is important to read through your policy to understand what exactly is covered and to what extent you are covered.

Cost of identity theft insurance

Identity theft insurance can be purchased as its own standalone policy but typically can be added to a standard homeowners insurance policy if it is not included in the policy already. If identity theft insurance is not already included in the home insurance policy but offered as additional coverage, it will probably be more cost-effective for the homeowner to add the identity theft coverage to their home insurance policy. Typically, the cost to add on identity theft coverage of $15,000 to $25,000 is roughly an extra $25-$75 per year in premium. This extra premium could be a drop in the bucket compared to the costs of restoring one’s identity as identity theft has become a pretty common occurrence in today’s ever more connected world.

Costs will vary from insurer to insurer and potentially from location to location. Make sure you check with your insurance agent to see what options are available to you and shop around to compare and contrast various policies or add-ons.

Homeowners Insurance Cost Calculator

What can I do to prevent identity theft?

While identity theft insurance can come in really handy when this disaster strikes, there are some preventive measures that you can take to stop identity theft from ever happening to you in the first place.

Some actions that can be taken to prevent identity theft include:

  • Not carrying your social security card or passport around with you.
  • Shielding your credit or debit card from those around you when purchasing something.
  • Shielding your pin number from potential onlookers when using ATMs.
  • Never giving out personal information over the phone unless you know it to be safe and making sure it will not be overheard by others.
  • Making sure you are only inputting your credit card information on safe websites when shopping online.
  • Not saving credit card information to various online websites can be helpful as well.
  • Changing passwords on a regular basis to keep the security level high.
  • Avoiding phishing scams.
  • Shredding documents that have personal information on them.
  • Monitoring bank accounts and credit cards along with setting up fraud alerts with these institutions.

These days most of us have a huge online presence. We all have a number of accounts on various sites, subscriptions, and more. Keeping it all organized and monitoring all of it can be quite a challenge. There are some cyber protection websites out there such as Norton LifeLock and Identity Guard that one can pay for. These companies provide professional monitoring of one’s online presence and can even reimburse you for stolen funds under their watch. These can be great options to look into as well to attempt to prevent identity theft from occurring to you.


Identity theft is a common and potentially very costly disaster that can occur to anyone. In today’s ever more connected and online world, it is more important than ever for one to take preventative measures to protect their identity. Thieves have become quite creative with the rise of the internet and other technology. Identity theft insurance helps protect the insured when this disaster does strike.

Identity theft insurance will reimburse the insured for expenses and fees associated with restoring one’s identity, but importantly, does not reimburse the homeowner for funds that were stolen from a bank account or racked up on a credit card. This is where banks and credit card companies are legally required to step in. Identity theft insurance, while sold as a standalone insurance policy, is commonly included as part of a standard home insurance policy or offered as an add-on at a low fee to the homeowner.

Get Cheap Home Insurance
Compare quotes from the top insurance companies in your area to find the cheapest plan
Photo of author
Kyle has extensive background in financial planning and financial writing. He is an expert in home, auto and life insurance. Kyle holds a Bachelor's degree in Business Administration from San Diego State University and multiple financial planning designations.
Notice an error or discrepancy?
Despite our rigorous fact-checking process, we recognize that errors can sometimes occur, as we are only human. If you discover any inaccuracies, oversights, or outdated information within this post, please bring it to our attention. Your input is highly appreciated and instrumental in maintaining the accuracy of our content. Contact us here.

Leave a Comment

Thank You for Visiting HOIC