On a daily basis, Millions of Americans become victims of Identity theft and fraud , and recovering your lost identity is a costly process. Identity theft insurance basically provides help in restoring your identity.
You probably already insure your auto, home and health. Should you add identity theft insurance to the list?
In this article, you’ll learn more about identity theft insurance to help you decide whether it’s right for you. For starters, you’ll find out how to get identity theft insurance and what it usually covers.
What is Identity theft Insurance?
Identity theft is when someone uses your identity in committing a fraud. In contrary to this, identity theft insurance is designed to overcome the loss of the person.It helps the victim by reimbursing the money spent on repairing their credit card reports and reclaiming their financial identities. The amount provided by the insurance policy provider can range from phone bills to legal help. Such policies often provide specialised officers who guide the victims through the crucial process of restoring ones identity.
Identity theft insurance can be added into your homeowners insurance policy or rental insurance as an extra coverage or you can also get it as an independent insurance.
How Does Identity Theft Insurance work?
Identity theft can occur in many ways, for example :
Someone may steal your credit/debit card or your account number or can gain access through data breachment. They then can purchase things or get a high amount of loan in your name.
Some crooks use phishing scams to lure you into revealing your information. These involve sending emails or texts that look like they’re from legitimate companies, asking you to provide your personal and banking details for updates or promotions.
No matter what the method, in the end you will be the one dealing with credit details and loans. This is when identity theft insurance kicks in Depending on the policy, it can help with a wide variety of circumstances involved in clearing up the matter, including:
- Lost Wages : If restoring your identity at work takes time than the insurance company will pay you your lost wages
- Notary Fees : In order to get your documents authorised after the incident, you might need to get them verified by a notary, the fees for it will be paid by your insurance company
- Mailing cost : You might want to ensure that your documents reach the right place, and for that you would want to use a certified courier company. The cost of this mailing process will also be covered by your policy provider.
- Phone Bills : If you are contacting a lot of people through your phone so that you can jump out of this situation then your phone bills will also be covered in this policy.
- Child Care : If you have to leave your child to some service provider meanwhile you work out the situation then these expenses will also be covered.
- Legal Fees : Attorney and court costs may result from identity theft problems, and they can rack up fast. Many identity theft insurance policies cover them.
- Credit Monitoring: A credit monitoring service will find out if your information is for sale, and will let you know if fraud is detected. Identity theft insurance typically includes it in the plan.
What does Identity theft insurance cost?
Identity theft insurance cost usually ranges from $25 to $50 a year, according to the Insurance Information Institute. The estimate is the same if you are buying additional coverage in your homeowners insurance or even if you are buying it as an independent insurance policy.
There is also a benefit limit to your policy, it can range from $10,000 to $15,000, according to the National Association of Insurance Commissioners.In case your cost for restoring your identity were say $20,000, then you would have to pay the difference only.
Some policies have deductibles: you have to pay the initial payment of $100 to $500 of cost before your identity theft insurance activates.
How can you reduce the chances of Identity theft?
- Keep a minimum amount of personal information in your purse : Incase somebody steals your purse or looks into it, they can not misuse your identity.
- Always take credit card receipts from an ATM machine: Don’t throw them in the dustbin or leave them loose where they can get stolen, as credit card receipts contain your account information.
- Monitor your Account details: Don’t rely on your bank as they won’t look into suspicious activity in your account. You should monitor your accounts yourself and keep track of debited money.
- Keep your computer security high: Install anti malware softwares in your laptop , to avoid any personal data breachment from your account.
- Place fraud alerts at the major credit bureaus. A fraud alert tells creditors to contact you before opening any new accounts or before making any changes to your accounts. This makes it more difficult for identity thieves to open accounts in your name.
- Use Strong passwords: Make sure the passwords that you use are strong and are not easy to hack.Moreover, your passwords shouldn’t be predictable , for example like a name of a family member.
- Dispose your personal papers properly: You should shred your personal documents before disposing them, so they can not be misused by any person.
- Beware of phishers : It’s a very common practice , where crooks email you portraying themselves as an authentic company ,asking about your personal information. You should verify such emails through proper systems to avoid giving any information to an identity thief.
Before signing up for identity theft insurance, you should see if it’s covered by your home insurance policy. You should also look at what it covers and what are your requirements. Many identity theft insurance policies have different limits, so you should look into it, and decide appropriately. Moreover, you should see if there is a deductible. This how you can decide which coverage is appropriate for your home insurance policy