Identity theft – Do you need insurance protection?

With files from jpcrete

This article was originally published on March 22, 2019 and was updated on January 2, 2026.

Identity theft and fraud are some of the fastest growing crime rates across Canada and can happen to anyone. If you’ve ever been or known a victim of identity theft and/or fraud, you already know the impacts can be devastating; from banking and identification fraud, to new loan applications and fraudulent passports – the possibilities for identity thieves and fraudsters seem endless.

It’s becoming increasingly important to protect your personal information and ensure that your identify remains safe and secure. But what are the necessary precautions to ensure that you are protected from identity theft? Is insurance worth it? Let’s look into how you can protect yourself, and whether you should add an identity theft endorsement to your home insurance policy.

Identity theft and fraud today

The ubiquity and interconnectedness of social media has redefined identity theft in the last several years. Identity thieves and fraudsters are no longer relegated to a forgery kit of blank passports, tweezers, ink, sealing wax, and photos – all they require is a name, address, and internet access.

It might be for this reason that identity theft and fraud in Canada has steadily increased. According to the Canadian Anti-Fraud Centre (CAFC), as of September 30, 2025 there's been 33,854 reports of fraud processed, over 23,000 victims and a whopping $544 million in fraud losses. 

What is identity theft?

The criminal code of Canada defines two categories of crimes related to fraud and theft of personal information: identity theft and identify fraud.

Identify theft refers to the process of acquiring and gathering your personal information for the purpose of criminal activities. Typically, identity theft occurs in the early preparation stage of identify fraud and it is illegal to possess personal information.

Identity fraud is the more serious act of using personal information for unlawful purposes such as applying for credit, loans and government benefits, accessing your financial assets, and even obtaining passports.

How to avoid identity theft?

There are some traditional precautions to protect your personal information that you might already be doing. They include things like shredding your mail, opting out of pre-approved credit cards and junk mail, and registering for fraud alerts with your financial institution. While these are some of the more traditional forms, protecting yourself online is also a crucial step in deterring identity fraudsters and thieves. 

Here are a few key steps you can take to prevent identity theft online:

• Never display details of personal or financial documents
• Turn off auto-login features
• Avoid location updates
• Apply stringent privacy settings
• Ensure your connections are legitimate and authentic
• Make use of double authentication
• Use a strong password and avoid using the same passwords for multiple accounts
• Never keep credit card information online
• Avoid geo-tagging photos
• Enable alerts for unusual activity

For more info, the CAFC website outlines tips protect yourself from scams and fraud.

If you are in the unfortunate circumstances of suspecting you are the victim of identity theft and fraud, stay calm and follow the CAFC'c steps on what to do if you're a victim:

1. Stay calm and collect your thoughts
2. Contact your financial institutions
3. Contact the police
4. Report the incident
5. Report to government agencies
6. Protect yourself from future fraud

Do you need identity theft insurance?

Most insurance providers offer identity theft insurance as an endorsement you can add to your home insurance policy. However, some insurers, such as the Co-operators include free identity fraud coverage on all home, condo and tenant insurance policies, up to $10,000.

That being said, when given the option to add an endorsement to your home insurance, is it worth the cost? In some cases, yes. Although it depends on your personal situation and whether you would lose income if you were a victim.

The financial consequences of identity theft and fraud can be devastating. Having insurance will not only help cover certain expenses, such as legal fees, but it may also provide income replacement if you're unable to work. Some insurers may also help you recover your stolen identity, taking on the burden of contacting the authorities and your bank.

It’s worth having a discussion with your employer about time off requests to handle and manage such an event. If you will lose money by being off work, then it may be worth adding the endorsement to your policy.

Discover what an identify theft endorsement could cost you by comparing home insurance quotes from Canada's top providers today. Remember that insurance companies differ so it is essential to review your policy regularly to confirm what you are or are not covered for. 

The bottom line

Identity theft and fraud is a serious risk in Canada that could impact you at any time. Opting to add an identity theft endorsement to your home insurance policy will cover you financially in the event your personal information is stolen. To avoid becoming a victim of fraud, stay alert and take steps to protect your privacy and identity, especially online.

Also read:

• What is personal cyber insurance in Canada, and is it worth it?
• How to protect your ID when you've lost your wallet
• How to clean up your digital profile and protect yourself from fraud