Most Identity theft insurance programs only deal with issues of credit problems and reimbursment cost of such and often have a cap like $15,000.
Credit problems with identity theft is a problem indead, but this can easily be the least of your worries. IRS audits will be a complete pain in the but out of three of the Identity theft insurance packages that I looked at do not mention anything about this. Also, if the person were to break the law using your identity, just think of all of the fun that you would have to find out you now have a criminal record or even a warrant for your arrest, might not be able to vote, might not be able to get that new job, as well as many other things that require a clean record. Now if that were to happen, it would cost you far more than what the identity theft insurance would ever cover.