Can Home Insurance Protect You from Identity Theft?

A crisis can bring out the best in people, but it hasn’t stopped fraudsters from trying to steal. Fraud and identity theft are on the rise as a result of the COVID-19 pandemic, according to a Johnson Insurance survey from 2020.

The survey revealed that 42% of Canadians have noticed an increase in suspicious texts, emails, and phone calls. While Canadians are familiar with the signs of identity theft – such as mysterious charges on their credit cards, receiving bills for services they don’t have, and unknown withdrawals from their bank account – many aren’t as familiar with other signs of identity theft, including:

  • You stop receiving credit card statements or most of your mail.
  • You get a phone call or letter informing you that you’ve been denied credit, but you didn’t apply for anything.
  • You get credit card statements or bills with your name on them, but you didn’t open these accounts.
  • A collection agency is seeking funds for an account with your identity that you didn’t open.

Risks of identity theft

Having your identity stolen can be a bit of a nightmare. There’s a financial toll as well as an emotional toll.

Some Canadians may not suffer as much as others, depending on what a thief does with the information. For example, a woman in British Columbia had her identity stolen last year, and the thief borrowed nearly $100,000 in her name to buy a Range Rover.

Homeowners who have paid off their mortgage are prime targets as they likely no longer have title insurance. As a result, thieves can steal hundreds of thousands of dollars by getting a mortgage in the owner’s name and taking the cash.

There’s also an emotional toll that comes along with identity theft. It can cause stress because of the time it can take to get your credit issues resolved.

How to handle identity theft

Having your identity stolen can be a bad experience, but there are some things you should do if you’re a victim.

First, you should contact all your financial institutions to flag your accounts. You should also change your passwords and contact both credit bureaus: Equifax and TransUnion.

Second, contact the police and get a file number. It can be updated if you notice any suspicious activity in the future.

Third, report the incident to various organizations, including the Canadian Anti-Fraud Centre. If your mail was redirected, contact Canada Post as well as your service providers (internet, phone, gas, electricity, etc.).

Contact Service Canada if you suspect someone is using your Social Insurance Number or Passport Canada if your passport is stolen. If other government-issued items, such as your health card, driver’s licence, or birth certificate are stolen, contact your province or territory.

How your home insurance can help

Many home insurance providers offer identity theft protection, which is optional and can be added to your home insurance policy for a small additional cost.

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This type of coverage may cover legal fees to challenge information in credit reports, defend yourself against lawsuits from stores or collection agencies, remove judgments against you, or contest the wrongful transfer of ownership of property.

It may also cover any lost wages as a result of taking time off work to resolve outstanding issues. And there may be coverage for fees that have to be paid when re-applying for new government-issued identification.

How to protect yourself

There are several ways you can prevent identity theft when you’re out in public, online, or if you own a vehicle.

At home, you should:

  • Check your mail daily — especially if you live in a house and your mailbox is easily accessible to anyone.
  • Shred documents or items with personal information on them when you no longer need them.
  • Review your bank and credit card statements carefully to make sure there aren’t any unknown withdrawals or charges.
  • Look at your credit reports from Equifax and TransUnion regularly to see if there are any accounts you don’t recognize.
  • Avoid giving out any personal information over the phone unless you’re the one who made the call.

When you’re outside your home, you should:

  • Try not to give out too much personal information when in a store.
  • Ensure no one is watching you when using an ATM.
  • Carry fewer credit cards and items with personal information with you in the event they’re stolen or lost.
  • Never tell anyone your PIN for your debit or credit card. And don’t use your birthday or year of birth as a PIN.

When you’re online, you should:

  • Avoid sharing your birthday or address, especially on social media.
  • Never use public Wi-Fi to make banking transactions or online purchases because it’s likely not a secure connection.
  • Be wary of emails or texts from your financial institution or the Canada Revenue Agency asking you to confirm personal information.
  • Change your passwords regularly and don’t use the same password for more than one site.
  • Check your banking and credit transactions as often as possible.
  • Sign up for text notifications each time a transaction is made on your credit card.
  • Set up two-step verification (or two-factor authentication) for your financial accounts to make it harder for a hacker to sign in.

And if you own a vehicle, you should:

  • Always have your proof of insurance and registration certificate on hand.
  • Ensure your windows are closed, and the doors are locked when leaving the vehicle.
  • Keep objects with identifying information in the trunk, not in the car where they may be visible.
  • Know where your keys are all the time.

Buying identity theft protection from your home insurance provider won’t stop thieves from trying to steal your identity, but it can help give you peace of mind and pay for the costs to get your credit back in order.