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As the number of identity theft cases continues to rise in our great nation, Canadians are looking for new ways to protect themselves against fraud. Many are turning to identity theft insurance, a policy that (for a monthly premium) will cover the cost should its policyholder’s identity be stolen. As a stand-alone product or an addition to an existing policy, identity theft insurance is available through most financial institutions and insurance companies. As more and more people take out these policies, it leads us to wonder if identity theft a worthwhile expense in today’s financial climate.

The numbers certainly suggest that something needs to be done regarding identity theft crime. The last full period for the Canadian Anti-Fraud Centre’s statistics was from 2012, a year that saw 17,009 Canadians fall prey to identity fraud, causing almost $16B in losses. That’s an average theft of $941, 000. Though last year’s statistics are incomplete (only representing half of the year’s numbers), the CAFC saw 10,000 reports of identity theft, resulting in $4.7B in losses. The numbers, in black and white, are upsetting; however, industry experts are divided over the true value of an identity theft insurance plan.

Proponents say that it covers unexpected costs that Canadian banks typically won’t, in addition to the initial theft. An insurance policy will pay for your lawyers (should you need to hire them), any days off of work taken (lost in order to manage your case), and administrative fees (should filing cost money) – all of which, when combined, can be a significant financial burden you may not be able to undertake on your own.

There are others that dismiss these costs, stating that the price of the policy isn’t worth the coverage considering there are other (more economical) failsafes that are available to Canadians. Unlike Great Britain, Canadian financial institutions will still cover the entire loss of the theft, meaning regardless of whether or not you have an insurance plan, you’ll never have to pay back the defrauded money. Meanwhile, the policy does not (and cannot) prevent identity theft from occurring. Opponents to the insurance suggest that taking preventative measures to foil identity thieves is a better and more economical way of avoiding fraud.

One of these preventative measures includes monitoring your finances. This is something that every Canadian should be doing in order to notice and flag fraud as soon as possible. Check you various chequing, savings, and credit accounts to be sure that no unusual activity is happening under your name. This is an activity that your financial institution will also be undertaking, and it will contact you should it recognize suspicious activity under any of your accounts. It’s also a good idea to periodically check your credit sore, to see if your score has fluctuated due to fraudulent activity.

Far more effective than supervising your accounts is actively removing your personal information from the hands of identity thieves. By making the confidential data that they use (like your Social Insurance Number, date of birth, and account numbers) impossible to find, you’re removing yourself as a target. Don’t throw out old bills, tax information, and other records that document your personal information into the garbage or recycling where anyone can find it. Use a professional shredding service to obliterate the information. Our residential mobile trucks completely destroy the physical and digital records of your confidential material, so there’s nothing left for thieves to use.

While identity theft insurance policies aren’t necessarily worthless, they don’t target the real problem. Without taking measures to prevent your personal information from being used against you, these policies don’t preclude you as a victim of identity theft. Incorporating our residential shredding services to your financial plan is a far more practical way to address the ever increasing threat of identity theft. By keep your personal information private, you’ll never need to have an insurance company help you cover the cost of theft. When you’re ready to include our disposal services into your schedule, be sure to give us a call and we’ll give you a quote. You’ll find that it’s much more economical than a monthly premium.