Do You Need Identity Theft Insurance And What Is It Anyway

Do You Need Identity Theft Insurance And What Is It Anyway

With the​ serious nature of​ identity theft,​ many people are turning to​ identity theft insurance as​ a​ method of​ protecting themselves from the​ ramifications resulting from this crime. But what exactly is​ identity theft insurance? Do I really need it​ and how much will it​ cost me?

Identity theft insurance coverage varies in​ coverage,​ deductible and costs,​ just like many other forms of​ insurance. in​ most cases identity theft insurance will cover lost wages due to​ time taken off work to​ correct or​ repair damages due to​ identity theft. However,​ this coverage often carries a​ limit,​ in​ the​ approximate amount of​ $2,​000.00. the​ Privacy Rights Clearinghouse estimates that victims spend on​ the​ average the​ equivalent of​ 22 work days trying to​ correct the​ damage from identity theft.

Identity theft insurance usually also provided benefits coverage for: attorney fees (which may or​ may not be necessary); notarization of​ documents,​ mailing,​ postage,​ supplies,​ copy costs,​ and phone bill charges which you​ may incur in​ an​ effort to​ correct the​ damage done to​ your credit and financial reputation.

Critics of​ identity theft insurance claim that it​ is​ “not worth the​ money,​” (Consumer Reports magazine,​ as​ reported on​ or​ that it​ does not provide enough benefits. the​ concerns include: identity theft insurance does not provide reimbursement for money that is​ stolen or​ for identity theft expenses that occurred because of​ who the​ “thief” was. Most commonly a​ family member is​ the​ culprit in​ the​ case of​ identity theft and in​ that instance most insurance does not pay benefits. a​ word of​ caution by the​ National Association of​ Insurance Commissioners is​ that insurance “cannot protect you​ from becoming a​ victim of​ identity theft and does not cover direct monetary losses incurred as​ a​ result of​ identity theft.” Although,​ an​ unfair criticism,​ some conclude that the​ purchase of​ identity theft insurance may create a​ false sense of​ security,​ thus consumers may not be as​ careful with their credit and financial information.

The cost of​ identity theft insurance cost varies on​ both the​ coverage and how you​ obtain your insurance. Identity theft insurance can range from free to​ approximately $200.00 a​ year depending on​ how you​ have purchased it. There are three main ways to​ obtain identity theft insurance:

- as​ a​ provision in​ your homeowners or​ rental property insurance
- as​ a​ service of​ your credit card company,​ bank or​ lender
- By purchasing it​ as​ an​ individual—“stand alone” policy

The first step in​ obtaining identity theft insurance is​ to​ contact your banks,​ credit cards,​ lenders and insurance providers. Determine what coverage you​ have,​ how much it​ will costs to​ add additional coverage or​ to​ add identity theft to​ an​ existing policy and get details of​ the​ existing provision if​ it​ exist. you​ may need to​ purchase it​ as​ a​ “rider’ or​ extra to​ your existing policy much like purchasing flood or​ earthquake insurance – but not as​ expensive.

In some cases credit lender; such as​ the​ credit card company,​ mortgage or​ other loan provider,​ provide identity theft insurance. This coverage may be free or​ it​ may require a​ yearly service fee through the​ lender. For example,​ American Express provides some form of​ identity theft insurance to​ its card holders free of​ charge; MasterCard offers it​ through the​ specific banking partners and VISA may do a​ combination of​ both options. One word of​ caution,​ make sure that the​ identity theft insurance covers all your existing credit,​ not just the​ one card associated with the​ coverage. if​ it​ only covers one card,​ that what happens to​ the​ remainder of​ your credit?

One other option is​ to​ purchase your own “stand alone” policy through most of​ the​ major insurance providers such as​ Nationwide,​ State Farm,​ and/or Farmers Group. if​ you​ are not using a​ “major” player in​ the​ insurance field be sure that the​ company you​ are purchasing from is​ reputable. Sometimes these are the​ most dangers purchases of​ all as​ they may be an​ effort to​ gain your credit information for the​ sole purpose of​ identity theft. if​ your insurance provider bills this coverage monthly,​ be sure to​ multiply the​ monthly cost by 12 to​ determine the​ yearly costs. Most importantly make sure to​ keep your coverage current.

Another consideration when utilizing identity theft insurance is​ the​ level of​ deductible. Generally the​ range from $100 to​ $250,​ but some may be as​ high as​ $1,​000. the​ Federal Trade Commission estimates that the​ average victim spends less than $1,​500 to​ recover from identity theft so it​ important to​ do the​ math and determine if​ your insurance premium plus deductible is​ a​ good value as​ well as​ provides the​ right level of​ protection for you​ and your family.

Nothing can protect you​ completely. it​ is​ important to​ follow all the​ basic rules for protecting your credit,​ identity,​ and financial information like: keeping your personal and credit information in​ a​ safe place,​ not releasing the​ information to​ others and shredding all documents. But it​ is​ also good to​ know that you​ can also have for free or​ purchase additional assistance in​ the​ form of​ coverage and monetary support during one of​ the​ most difficult financial times in​ your life.

Finding out about damages to​ your identity and credit is​ just the​ beginning. After that begins the​ time consuming and often frustrating process of​ repairing the​ damage and correcting the​ mistakes. Identity theft insurance may be your choice to​ help you​ through this expensive and frustrating task. Make sure you​ know what options and coverage are available to​ you.

Do You Need Identity Theft Insurance And What Is It Anyway

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