Does Home Insurance Cover Identity Theft?

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Identity theft insurance is not typically included in a standard home insurance policy. However, you may be able to buy this coverage via an endorsement added to your homeowners plan. Learn how you can be proactive about keeping your personal information safe as well as the cost of coverage.

Key Takeaways

  • Identity theft occurs when someone’s personal and financial information is stolen and used by someone else for personal profit.
  • Identity theft insurance generally only covers expenses related to recovering and protecting your identity, not financial losses caused by the theft itself.
  • Equifax, Experian and Norton provide an identity theft protection service
  • Taking proactive steps to prevent identity theft, such as checking your credit reports and monitoring your bank accounts are some of the best ways to protect yourself.

What Is Identity Theft?

Identity theft is a type of fraud where an individual's personal and financial information is stolen and used by someone else for their own gain. This can include stealing a person's name, date of birth, social security number, credit card numbers, bank account information and other identifying details.

The identity thief then uses your information to open credit accounts, make unauthorized purchases, apply for loans, file false tax returns and engage in other illegal activities. Victims of identity theft may not realize they have been targeted until it's too late, as thieves may use the stolen information weeks or months after it was obtained.

What Is Identity Theft Insurance?

Identity theft insurance is a type of coverage that provides financial assistance and other support to victims of identity theft. While coverage can vary depending on the insurance provider and policy, it typically reimburses for identity theft recovery expenses such as the cost of credit monitoring services and obtaining new documents.

Some identity fraud insurance policies may also provide access to identity theft resolution services. These services can assist with restoring a victim's credit report, notifying creditors and filing a police report. In addition, some policies may offer identity fraud protection and resolution assistance, which can help victims navigate the process of resolving fraudulent accounts or transactions.

Identity theft insurance does not prevent fraud from happening, nor does it provide coverage for losses resulting from the theft itself. Rather, identity theft insurance provides support for recovering from the aftermath of identity theft.

What Is Covered by Identity Theft Insurance?

Identity theft insurance coverage focuses primarily on expenses related to helping you recover your identity and protecting it from future theft attempts. Here are some common areas that may be covered by identity theft insurance:

  • Identity restoration: These expenses may include the costs associated with notifying credit bureaus, government agencies, financial institutions and other organizations about the theft of your identity. Your insurer may also cover the cost of obtaining credit reports and hiring an attorney.
  • Lost wages: In some cases, you may need to take time off work after suffering from identity fraud to get your metaphorical house back in order. Identity theft coverage can cover a portion of your lost wages during this time.
  • Legal fees: This includes attorneys fees associated with filing suit against an identity thief.
  • Credit monitoring and fraud detection: These services will alert you of any suspicious activity on your credit report, which can help prevent future identity theft. Also, you may be notified if any of your personal information is found on the dark web.
  • Additional expenses: Depending on the policy, your insurer may also cover costs associated with obtaining a new driver's license or passport, postage, notary fees and bank fees.
  • Childcare: With identity theft sometimes requiring your attention to be elsewhere instead of with your child/children, this coverage can help offset the cost of childcare services.

What Isn’t Covered?

Here are some examples of what may not be covered by identity theft insurance:

  • Pre-existing identity theft: This refers to any identity theft that occurred before the policy was in place. So, if you were a victim of identity theft last year and purchased identity theft insurance today, coverage would not be retroactive.
  • Financial losses caused directly by the identity theft: Examples would be stolen money or unauthorized transactions on a credit card. Identity theft insurance generally only reimburses for recovery-related expenses such as identity restoration and fraud monitoring.
  • Business identity theft: You would need commercial-grade coverage in this event.
  • Non-financial losses: Emotional distress or damage to reputation would not be covered.
  • Criminal activity: If the victim was involved in illegal activity or was complicit in the identity theft, the policy will not cover the losses.

Do I Need Insurance for Identity Theft?

If you are at risk for identity theft, such as if you frequently use your credit card online or have been the victim of a data breach, you may want to consider purchasing identity theft protection insurance. Whether or not you need an identity theft insurance policy will depend on your individual situation.

If you choose not to buy identity theft insurance, you should still take proactive steps for preventing identity theft, such as monitoring your credit report regularly.

Will My Homeowners Insurance Policy Cover Identity Theft?

Identity theft insurance is not typically covered in a standard homeowners policy. In most cases, an identity theft insurance endorsement, or policy add-on, is necessary for receiving coverage for certain identity theft-related losses.

Is Identity Theft Insurance Worth It?

If you have a high risk of identity theft due to factors such as a history of data breaches, identity theft insurance may be worth considering. Keep in mind, identity theft can have a significant financial impact, including lost wages, legal fees and expenses related to restoring your identity. And if you're worried about cost, identity theft coverage will typically run $25 to $60 a year.[1] At most, that's only $5 a month.

However, if you are regularly monitoring your credit history and bank accounts, updating your passwords and using a VPN (more on that later), then perhaps identity theft insurance may not be as urgent a necessity. Still, nearly 6 million reports of identity theft were reported in 2021.[2] Going without coverage is a risk.

How Much Does It Cost for Identity Theft Coverage?

On average, identity theft coverage ranges from $25 to $60 with pricing depending on the amount of coverage you buy and your carrier and individual risk assessment, among other factors.[1]

  • Coverage level and limit: The more comprehensive the coverage and the higher your limits, the more you will pay for identity theft insurance.
  • Insurance company: Since insurers use their own pricing methodology, different insurers may offer different rates for the same level of coverage.
  • Risk factors: Things such as your credit history and occupation can impact the cost of coverage.
  • Deductible: Choosing a higher deductible can lower your premium, but also means you'll pay more out-of-pocket if you need to file a claim.
Talk to a Licensed Agent About Adding Identity Theft Coverage to Your Policy

Which Insurance Carriers Offer Identity Theft Coverage?

Several insurance companies offer identity theft coverage or a rider on a renters insurance or homeowners policy. Here are some identity fraud coverage options:


Individuals who purchase home insurance policies through Allstate can get optional identity theft protection, a digital footprint service that collects information from your financial accounts and alerts you if someone tries to open a new one in your name. It also alerts users when a thief has breached their data as well as tracks information that appears on the dark web.

State Farm

State Farm offers identity restoration insurance that costs $25 per year.[3] This endorsement can be added to your State Farm home, renters, condominium and manufactured home insurance. It covers yourself, your spouse, relatives and dependents (under 21 years old) who live in your household. The company offers two types of restoration services that can help identity fraud victims navigate through the recovery process: cyber event identity and fraud loss coverage (CEIDR).


Nationwide provides an identity theft endorsement that can be added to an auto, home, renters, condo or RV policy. The rider costs $45 a year and will pay back eligible out-of-pocket expenses up to a limit of $25,000 as well as grant you access to a group of cyber risk experts to assist you.[4]

The Hartford

The Hartford offers identity fraud expense coverage endorsement that reimburses you after someone uses your personal information without your permission.

Liberty Mutual

Liberty Mutual provides an identity theft insurance policy that includes coverage for missing wages documented by an employer, expenses related to hiring an attorney, fees for reapplying for loans that were rejected due to fraudulent activity, and personalized assistance to help you monitor your credit and negotiate with creditors.[5]

Other Options

Additionally, you can get an identity theft protection service provided by credit bureaus such as Equifax and Experian.

Norton also offers an identity theft protection called LifeLock. Norton will scan the internet for any use of your personal information. If it identifies a threat, a certified restoration specialist will resolve the threat as quickly as possible. Norton will also provide up to $3 million in coverage with up to $1 million for legal representation, expense reimbursement and reimbursement for stolen funds.[6]

8 Tips To Avoid Identity Theft

While identity theft coverage can provide a safety net, it's always best to avoid becoming a victim in the first place. Here are eight tips to help you protect your identity:

  1. Shred documents. Dumpster diving can be a lucrative pastime for those looking for hard copies of bank statements and anything else that has personal information.
  2. Consider installing a more secure mailbox. Many come equipped with a key so anything dropped inside is more difficult to steal. Other more elaborate mailboxes have a similar lock and key setup but go one step further by being encased in brick or concrete.
  3. Don’t immediately believe a caller is from your bank or credit card company. In fact, never give any personal information over the phone. Call your bank or credit card company if you’re contacted by someone claiming to belong to your financial institution.
  4. Monitor your credit reports regularly. Look for any suspicious activity and report any errors or unauthorized accounts immediately.
  5. Use strong passwords and two-factor authentication. Doing so will make it more difficult for hackers to access your accounts.
  6. Be cautious of phishing scams. Don't click on links in emails or text messages from unknown sources and be wary of any requests for personal information.
  7. Use a virtual private network (VPN) when using public Wi-Fi. A VPN is a secure and encrypted connection that allows users to access the internet or a private network remotely while keeping their online activity private and protected. This can help protect your information from being intercepted by hackers on the same network.
  8. Secure your devices. Use antivirus software and keep your devices up-to-date with the latest security patches.

If you are a victim of identity theft, file a report with the Federal Trade Commission (FTC). Filing an FTC identity theft report will help the government set up a recovery plan to help salvage your personal information and make sure your data is secured.


What are my rights if I'm a victim of identity theft?

If you're a victim of identity theft, you have the right to place a fraud alert on your credit report, dispute fraudulent charges and file a report with the Federal Trade Commission (FTC) and local law enforcement.

Why do I need identity theft coverage?

Identity theft coverage can provide financial protection and assistance in the event that your personal information is stolen. It can cover expenses such as legal fees, lost wages and the cost of restoring your credit.

Does renters insurance cover identity theft?

Identity theft is not typically covered by a renters insurance policy. However, you may be able to buy an endorsement that will add this coverage to your policy.


  1. Equifax. “What Is Identity Theft Insurance?” Accessed March 9, 2023.
  2. Experian. “Identity Theft Is on the Rise, Both in Incidents and Losses.” Accessed March 9, 2023.
  3. State Farm. “Identity Restoration Insurance Can Help You Recover.” Accessed March 9, 2023.
  4. Nationwide. “ID Theft Protection.” Accessed March 9, 2023.
  5. Liberty Mutual. “What Does Identity Theft Insurance Cover?” Accessed March 9, 2023.
  6. Norton. “LifeLock Works to Fix Identity Theft During Tax Season and Beyond.” Accessed March 9, 2023.

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