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What Is Identity Theft Insurance?

Updated: March 2020

If your identity is stolen, identity theft insurance (sometimes called an identity theft protection plan) helps cover out-of-pocket costs associated with restoring it. Some identity theft protection plans may also include proactive monitoring services and will alert you when potential identity theft problems arise.

Keep reading to learn more about identity theft insurance and how it can help protect you.

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What Does Identity Theft Insurance Cover?

Identity theft insurance plans may include the following services:

Identity Monitoring
If your plan provider offers identity monitoring, they'll likely keep an eye on things like your credit report, change of address records or credit card and loan applications, says the Federal Trade Commission (FTC). If they find any new or suspicious activity, you'd then receive an alert.

Your plan provider may also monitor things like the dark web, says Experian, and will alert you when personal information is found (such as your phone number or email address). These alerts may help you get ahead of identity thieves by giving you the opportunity to, for example, change passwords to accounts that use your email address.

Identity Remediation
Identity remediation services are helpful if your identity is stolen. This is because the Insurance Information Institute (III) says identity theft can cause harm to your credit and reputation, which can take a lot of time and money to repair. Some insurers will provide access to a remediation specialist to help restore your identity. Plans may also help reimburse you for fees associated with restoring your identity, such as:

  • Administrative fees (such as postage or notary costs)
  • Legal fees
  • Lost wages (for example, if you need to take time off of work to restore your identity)

Remember that purchasing identity theft insurance will not prevent your identity from being stolen in the first place. But, it can help alert you to a potential identity theft problem before it gets worse and help you restore your identity. To help safeguard your information, consider taking steps to help prevent identity theft, such as only making online purchases through secure websites and learning to recognize phishing scams, says the III.

How Much Does Identity Theft Insurance Cost?

The price you pay for identity theft insurance depends on the type of coverage you choose. Some companies offer tiered plans for different monthly rates. For example, you might find that a higher tiered service plan includes extra monitoring or remediation services (such as monitoring services for more than one credit bureau). This means you might pay more for a plan that offers a wider variety of services.

How Do I Get Identity Theft Insurance?

Your home or auto insurance provider may offer identity theft insurance, or you can consider purchasing an identity protection plan from a dedicated identity theft protection company.

Identity restoration coverage, which is a separate type of plan, might also be available as an endorsement on your homeowners insurance policy. However, keep in mind that identity restoration coverage doesn't typically provide identity monitoring services. It will usually only help reimburse you for out-of-pocket costs associated with restoring your identity.

Do I Need Identity Theft Insurance?

Identity theft can happen to anyone, and the FTC says victims usually need to take several steps to recover. If you're concerned about keeping your personal information secure, you may want to consider buying identity theft insurance.

But, before buying an identity theft protection plan, you may also want to consider any coverage you may already have. Perhaps you do have identity restoration coverage included in your homeowners insurance policy. Or, maybe your credit card provider offers credit monitoring and alerts you to new activity on your credit report. Whatever the case, make sure you understand any existing services you have since coverage can vary — and remember that the monitoring services a credit card company provides and identity theft insurance, for example, are not necessarily the same thing.

When you are ready to purchase identity theft insurance, take time to understand what the plan covers. To help accomplish this, it may be a good idea to ask a plan provider the following questions, says the FTC:

  • What websites or reports do they monitor?
  • How often will they be monitoring for your information?
  • What personal information do they need from you to start monitoring your identity?
  • Are there any additional services or fees you should be aware of?

Remember, buying identity theft insurance will not prevent your identity from being stolen. But, it can help provide you with some peace of mind when it comes to catching potential identity theft problems before they get worse.

Related Resources:

This content is for informational purposes only and may not be applicable to all situations.

Identity theft insurance underwritten by Assurant. The description herein is a summary and intended for informational purposes only and does not include all terms, conditions and exclusions of the policy described. Please refer to the actual policy for terms, conditions, and exclusions of coverage. Coverage may not be available in all jurisdictions.

Allstate Identity Protection is serviced and provided by InfoArmor, Inc., a wholly owned subsidiary of The Allstate Corporation. Allstate Identity Protection is not an insurance product.
ECC Monitor: OK