The recent rise in identity theft cases has opened the door to a new service, identity theft insurance. And just like medical insurance, you hope you never have to use it but it’s nice to know you have it, if you ever need it. The Federal Trade Commission estimates that more than 9 million individuals are victims of ID theft each year and they expect the number to grow by 300% over the next few years. The question most people want to know is what does the identity theft cover and how will it protect othem from identity theft?

From doing a limited online search it looks like the price to add it as a rider to ones homeowner insurance our to purchase as a stand alone policy can run from $25 to $100 annually. It’s true that the insurance will not prevent a thief from stealing your identity to obtain credit cards in your name and it will not reimburse you to cover your financial loss. It covers the cost associated with repairing the damages to your name, credit, medical insurance, driver’s license, and other identity theft areas. Identity-theft policies can provide about $15,000 to $25,000 worth of coverage for expenses such as lost wages, notary, phone bills, and certified mailing costs. Some insurer’s will provide attorney fees. Pre-Paid Legal Services provides a package that includes attorney fees and identity restoration. I believe their coverage includes assisting you in clearing your name and credit by making phone calls, along with writing and sending letters on your behalf.

One still needs to do all of the little things like checking your monthly credit card and bank statements, monitoring your credit report for unauthorized activity, shredding personal documents, and knowing exactly who you are submitting personal information to online.

If you become a victim be prepared to spend many hours, days or even weeks to fix the problem. The Justice Department estimates that more than 3.5 million households are affected by identity theft each year. Technology has made it much easier for the criminals to steal your identity, not to mention the occasional employee who loses his notebook computer with thousands of names and their social security number, home address, bank account and/or credit card numbers stored in a database.

If the policy includes some type of legal representation, identity theft insurance can be a viable option at a time where many companies are exchanging information, data is being stored and hacked into on the internet, and people you know and trust are selling your information.

Before you sign on find out exactly what the policy covers. It’s important to know how it will work in the event you need it.

 

Copyright© 2006-2007 PreventingIdentityTheft.net. All rights reserved