The Dowd Snapshot: Key Takeaways
- In general, standard homeowners insurance does not automatically cover identity theft, which can lead to insurance gaps.
- Many carriers offer identity theft coverage as an endorsement or optional add-on, designed to help with covered recovery costs such as legal fees, lost wages and administrative expenses.
- Practical steps like freezing your credit, monitoring statements and using strong, unique passwords can help reduce your risk.
- Reviewing your policy for insurance gaps can help you decide whether additional protection makes sense for your household.
Does Standard Homeowners Insurance Include Identity Theft Coverage?
The short answer: typically, not by default. A standard homeowners policy may help with certain theft-related losses in limited situations, but identity restoration expenses are often not included unless your carrier offers identity theft protection as part of the policy or as an endorsement. That matters because recovering from personal identity theft can involve attorney fees, notary or mailing costs, lost wages from time away from work and other administrative expenses.
That’s why it’s important to look closely at possible insurance gaps. Identity theft coverage is often relatively inexpensive as an add-on, with the Massachusetts Division of Insurance noting that identity theft insurance generally costs about $25 to $60 per year.
How Can You Protect Yourself Against Personal Identity Theft?
Good prevention habits are still essential. For example:
- Monitor account activity regularly.
- Use strong and unique passwords, and enable multi-factor authentication.
- Be cautious when sharing personal information online or over the phone.
- Shred sensitive paperwork.
- Review your credit reports for unusual activity.
Even with strong habits, personal identity theft can still happen. That’s why many people choose identity theft coverage as part of a broader protection strategy. Prevention helps lower risk. Coverage can help you deal with the aftermath.
Is Identity Theft Coverage Right for You?
While not a substitute for prevention, identity theft insurance coverage can provide valuable support when recovery becomes time-consuming and expensive. Depending on the policy, coverage may help reimburse certain restoration-related costs and may also include access to recovery services. For insured adults who want an extra layer of protection, it may be a practical, low-cost option worth considering.
Talk to us about your risk level and whether identity theft coverage could help close insurance gaps in your current policies. We can help you review your options and find protection that gives you peace of mind.