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Can Your Homeowners Insurance Protect You From Identity Theft?

Homeowners insurance is a vital tool to protect your financial and personal investment in your home and belongings. But it can help in one unexpected way: identity theft protection. Why might you consider adding this protection to your home insurance? What does it cover? And where can you learn more? Here's what you need to know.

Why Add Identity Theft Protection?

Your home and vehicles are often a treasure trove of personal identity information. Consider all the documents, statement copies, laptops, mobile devices, birth certificates, passports, and personal mail that may be lying around your home right now. If a thief gets into your home or vehicle, they may do more than just make off with some financially valuable asset. They may also make off with enough sensitive information to steal your identity and further steal from you. This potential link between physical theft and data theft is why many homeowners insurance policies allow you to add a rider or endorsement which includes assistance after such an incident. However, identity theft through any source is usually also covered.  

What Does Identity Theft Protection Cover?

So, what does identity theft protection insurance actually cover? In general, it's designed to help pay for you to sort out the mess that identity theft can cause. This includes things like fees for services that monitor or repair your credit usage, fees for replacing identification documents, legal fees, and travel expenses related to the identity loss issue. This insurance doesn't pay for two important elements of identity theft. First, it doesn't work proactively to prevent a loss. Want to buy an expensive home safe to protect your documents? This is not an eligible event or expense. It's unlikely to be an eligible expense after a loss, as well. Second, the endorsement doesn't reimburse you for direct losses that may occur after a theft. For example, if a home thief steals your PIN card and takes $1,000 from your bank account, your insurance may pay things like bank fees, a credit guard service, and rush fees for new accounts. However, you would need to work with the bank to get the $1,000 back through their normal procedures. 

Where Can You Learn More?

Should you add identity theft insurance to your current or future homeowners policy? The answer, in an increasingly risky environment for identity theft and cybercrime, is probably "yes." Start by learning more through a consultation with a qualified insurance agent in your state today. 

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