Safeguarding your identity with homeowners insurance.
Identity theft is no joke. It’s a crime that can quickly ruin someone’s reputation, finances, credit score, and more. Many people believe that their home insurance policy will help to pay the fees involved with sorting out an identity theft crime, but this isn’t always the case. Standard home insurance policies do not cover identity theft but there are ways to incorporate this type of protection into your home coverage.
What is identity theft?
Identity theft is the taking and using your name and other personal information, including your address, date of birth, credit card, and bank account details. If this information is stolen, a criminal can use your personal details to withdraw money from your account, take out a bank loan or use your credit card.
In today’s society, it’s relatively easy for a fraudster to obtain sensitive information, even if you’re careful online and shred paper documents. Almost 50 percent of personal information used by identity thieves is taken from stolen laptops, lost memory sticks or other portable devices used to store data. Other items such as a stolen passport or a driving license can be used for fraudulent purposes, too.
When your identity has been used fraudulently, it can take a lot of time and expense to prove that you are not personally responsible for any loans, debts, large financial transactions or serious crimes carried out by someone else using your identity. It’s likely that there will be legal costs to pay and you may need to take out a loan to cover your legal defense.
Home insurance and identity theft
Generally, standard home insurance coverage does not offer any identity theft coverage. However, you do have an option to add this as an endorsement (also known as a rider) to your policy. These endorsements focus on recovery costs and restoration services.