Do you need to buy identity theft insurance?
Identity theft is a crime that involves someone using another person’s personal information, such as their full name, their credit card, their SIN, which are then used to commit other crimes. Identity theft is a serious crime that comes with serious ramifications, and can come in different forms: virtual, medical, and financial. Unfortunately, rates are only on the rise as instances have jumped from 2% of Canadians experiencing some form of identity theft in 2010 to as much as 20% in 2020.
Besides taking the necessary measures to protect your personal identity and information, there is another solution. Many property insurers – whether that’s condo, home, renter’s, etc. – offer identity theft insurance, which can be purchased as an add-on. Due to the prevalence and high risk of identity theft, one would think that identity theft insurance is an essential purchase. Here’s the lowdown on whether you need to buy identity theft insurance or not.
What identity theft insurance covers –
Identity theft insurance may be purchased as an add-on and is designed to cover any expenses related to restoring your identity. Policies vary by exact carrier, but you can expect to have the following expenses covered:
- Certified mailing expenses
- Notary expenses
- Screening the black-market web for info
- Searching public records
- Loss of wages
However, an identity theft insurance policy will not cover any direct losses – i.e, money that has been stolen from you through your credit card or otherwise – and your policy is subject to a deductible. You may also have limits to your coverage.
How much does it cost to buy identity theft insurance?
Insurance policies all range in cost depending on how comprehensive/extensive your coverage is, what your limits are, and where you are located geographically. You may not expect to pay more than $100/year for identity theft insurance however, as this policy is generally among the more inexpensive options as far as add-ons for property policies go.
Do you need identity theft insurance?
It depends. Unfortunately, there’s no straight answer to this question, and the fact of the matter is that it really varies depending on your scenario. With some individuals, the added premiums may not be worth the actual financial losses that result from a fraud or identity theft case. Your time and efforts may be better spent having a discussion with your employer about how to request time off in the event of an identity theft event. This can help you gauge the total potential monetary losses.
That all being said, there’s a lot of debate amongst insurers as to the value of identity theft and fraud protection. The payment for identity theft insurance is intended to resolve any issues associated with identity theft, legal assistance, and account for time off work. If you figure you will be losing a considerable amount of money by being off work and busy attempting to resolve your identity theft crisis, you may consider adding this coverage to your policy.
Avoiding identity theft
Insurance is one thing, but it’s important to take the necessary precautions to protecting your personal identity and information before you even consider purchasing a policy. Here are a few tips:
- Turn off auto-login, location updates, and geo-tagging photos
- Ensure that your connections are secure
- Never show anyone the details of your personal and/or financial documents
- Turn on your unusual activity alerts
- Use multiple passwords for different accounts that employ upper and lower case, different symbols, numbers, and letters
- Use multi-factor authentication, like a pin number and fingerprint
- Do not allow any website or search engine to store your passwords
These are just a few tips, but the sad reality is that an identity theft event can occur even with all the necessary measures we take to prevent them. You’re probably already doing the bulk of your cautionary measures already, like registering for fraud alerts and shredding sensitive physical documents.
If you do end up becoming the victim of identity theft, you will need to call your local police and file a report as soon as you suspect your personal information may have been stolen. Call your bank and credit card number and contact both Equifax Canada (at 1-800-465-7166) and TransUnion Canada (at 1-877-525-3823.)
Finally, you’ll want to report the event to the Canadian Anti-Fraud Centre. This can be a long process, but it’s important to do in order to begin the process of identity theft recovery.
The lowdown on identity theft insurance
So, do you need identity theft insurance as an add-on to your existing personal property policy? Maybe. There’s no one answer to this question, and it’s really up to you to weigh whether the premium increase is worth the potential losses. Discuss with your friendly representative at Panda7 if you want an experienced broker in your corner who can help you out with making a decision.
If you can’t make a decision 100%, you may want to consider purchasing a baseline level of protection but avoid anything that is tagged as “premium” or “enhanced.” These may cost you more money than they’re worth, and the baseline protection will give you peace of mind without burning a hole in your pocket. In addition, you’ll want to consider reviewing your existing cautionary measures to protecting your personal information and see if there’s anything you can do to boost your prevention strategies.
