What can identity theft insurance help cover?

Identity theft insurance is primarily designed to cover the costs associated with recovering from identity theft. This can include expenses such as legal fees, lost wages due to time spent resolving issues, and various other costs that may arise as a direct consequence of the theft of one's identity. The aim of this insurance is to alleviate some of the financial burdens that individuals may face while trying to restore their identity and rectify any damage done.

While some identity theft policies may offer some level of coverage for certain unconventional scenarios, the main focus and benefit of identity theft insurance is the support it provides in the recovery process rather than coverage for new purchases, existing credit card interest, or unpaid taxes. Understanding this essence is crucial for anyone considering how to effectively manage and mitigate the risks of identity theft in their financial planning.