Victim of a Data Breach? Here’s How Identity Theft Insurance Can Help

Last week saw the largest data breach in history, involving a whopping 16 billion login credentials. According to Cybernews findings, cybercriminals now have record access to Google, Facebook and Apple user accounts.  

Tech experts say the breach gives cybercriminals access to massive amounts of personal information that can affect billions of online accounts, leading to account takeover, identity theft, and even highly targeted phishing. 

If you’re worried about protecting your identity from such potential scams, there are steps you can take to protect yourself. While there’s no one way to fully prevent identity theft, taking precautionary measures and having the right insurance coverage can cushion the financial blow. 
 
According to Samantha Schmidt, licensed insurance advisor at Surex, many people assume that identity theft is automatically covered under their home insurance. But that is often not the case. It’s something you need to add on, and Schmidt says it’s worth it. 

“More clients are recognizing the value (of identity theft coverage) and are open to having it included when we explain the benefits.” 

The cost of adding identity theft coverage is relatively low, especially compared to the potential financial and emotional toll of restoring your identity. “It provides peace of mind and access to expert help during a stressful time,” she adds.

Just how hard are data breaches hitting Canadians?

Data breaches are on the rise in Canada, impacting different sectors and leading to growing concerns among online users. 

IBM’s latest Cost of a Data Breach Report reveals that the average cost of a data breach for Canadian organizations reached $6.32 million in 2024. Financial services and tech companies bore the brunt, with breaches costing them an average of $9.28 million and $7.84 million respectively.  

Phishing remains the top entry point for attackers, accounting for 14% of breaches and averaging $6.38 million in damages per incident — a clear sign that cyber threats are becoming more disruptive and harder for security teams to manage. 
 
Some of the major data breach incidents in Canada include the Desjardins breach in 2019 affecting 4.2 million members, while the LifeLabs data breach impacted 15 million Canadian users in the same year. The recent breaches at the Canada Revenue Agency (CRA) also highlight the vulnerabilities in government data protection. In 2020 alone, the agency was target of a large-scale cyberattack affecting approximately 11,000 CRA and Government of Canada accounts. Since then, more than 30,000 privacy breaches have been reported by the agency. 

Is Identity Theft Insurance coverage worth it?

Experts say yes. You can never truly predict the impact of a data breach or identity theft.  

“The cost of adding identity theft coverage is relatively low, especially compared to the potential financial and emotional toll of restoring your identity. It provides peace of mind and access to expert help during a stressful time,” Schmidt affirms. 

She recalls an instance of how one of her clients’ discovered unauthorized credit accounts opened in their name. The client’s identity theft coverage helped cover the costs of legal assistance, credit monitoring, and time off work to resolve the issue up to the insurable limit.

Beyond insurance, you can also take proactive steps to prevent identity theft and financial losses in the wake of a data breach. 

1. Enable multi-factor authentication: Most of us use more than one device to log in to email accounts and financial or banking accounts. Make sure you use multi-factor authentication that protects your login credentials in case someone tries to steal your password. 
    
2. Use a password manager: While it may seem cumbersome to keep changing passwords, it is the only way to protect you in case of a breach. Consider it a bitter pill you must take to protect your identity. Avoid using old passwords, or obvious information like birth date as a password, and use strong passwords that are hard to guess. Delete any unused online accounts and use a password manager on all devices to secure your credentials. 
    
3. Check your credit reports regularly: You must check your credit reports (free in Canada via Equifax and TransUnion) at least once a week or on your billing cycle, to review suspicious credit activities and prevent unauthorized fraud payments. 
    
4. Shred sensitive documents: Never leave ATM receipts, or card payment bills unattended. Make sure you shred or strike out personal information on sensitive documents before discarding them. 
    
5. Avoid using public Wi-Fi for banking or sensitive login: Public Wi-Fis are more susceptible to breach, so avoid logging into your bank account when connected to a public Wi-Fi. Use technology that enhances security and privacy when using the internet, like digital signatures, data encryption and anonymizing services. 
    
6. Never share your card pin or login password with an acquaintance: For safety reasons, it is best advised to never share your banking pin or email login password with anyone else.  

Unfortunately, if you’ve been a victim of a data breach, here’s what you can do to lessen the impact: 

1. Report the breach: Contact the affected institutions you’re a part of that are compromised in the breach. Ask them what steps you can take to secure your information and if you’re eligible for compensation. File a report with the police and get a case number for future reference. You may also notify Service Canada is your SIN is involved. 
    
2. Place a fraud alert: Let your financial institution know that you’d like to place your credit line on fraud alert and monitor potential unauthorized credit usage. Keep a record of all your communications and actions taken by the affected institution. 
    
3. Freeze your credit: In case of financial fraud, make sure you report and freeze your credit with Equifax and TransUnion. 
    
4. Use secure browsers, VPNs, and security apps: Change existing passwords and use secure browsers, VPNs and security apps to protect your personal information. 
    

5. Initiate your claim: If you have identity theft coverage protection on your home insurance or separate coverage for the same, reach out to your insurance company as soon as possible and file a claim. While coverage varies by insurer, Schmidt says typical inclusions may involve: 

                                        a. Legal fees to restore your identity 

                                         b. Lost wages due to time taken off work to resolve identity issues 

                                         c. Credit monitoring and fraud alert services 

                                         d. Costs for notarizing documents, mailing, and obtaining credit reports  

 
Identity theft is a big threat, especially after a major data breach. Having the right tools at hand to protect yourself and your financial information is critical, and insurance can offer that peace of mind and protection. Being proactive with your personal information and reviewing your insurance coverage and policy is the best way to prevent yourself.  

Schmidt confirms that Identity theft coverage is typically offered as an optional add-on to home insurance. However, Surex insurance advisors proactively include this coverage in their quotes to help ensure all clients are protected. 

Talk to your insurance provider about what protection you already have in case of a data breach or identity theft, and whether you need more. A few extra dollars towards the premium could save you potentially thousands of dollars if your identity is ever stolen.