Identity Theft Insurance

Identity theft insurance is one of the newest types of insurance, and many people are buying the policies to give themselves ease of mind and to protect themselves in case their identity really is stolen. But, does identity theft insurance really protect you, or should you just pass it up? This article will go through exactly what you get with this insurance, so you will know if it is good or not.

No Protection Against Identity Theft

Some people buy identity theft insurance, thinking it protects against having their identity stolen. Except for in special cases, this is not what this insurance covers. There are very few services that can accurately determine when identity theft occurs, and there are also few services that can properly stop this theft from happening.

What is Covered Then?

When your identity is stolen, you have to go through a lot of work to contact banks and merchants, copying files and filing forms with different agencies. That work adds up to costs for the copies, calls and filing the forms. This is where identity theft insurance comes in. It will reimburse you for these costs, which can add up to a lot.

You may also incur fees for reapplying for credit or loans that had been declined due to your damaged credit score. According to most reports, all the copies and calling tend to cost people between $1,000 and $1,500.

Legal Fees

In some cases, you will have to go to court over this issue. Some identity theft insurance policies cover this as well, but it is an uncommon feature. Typically, this type of policy has a much higher deductible and yearly rate, because it offers a rather expensive service. The legal fees are often for some, but not all, lawyer fees.

Financial Reimbursement

While very few policies will pay you back for any debts you are responsible for paying as a result of your stolen identity, some policies will pay you for time taken off from work to deal with sending out the letters and making calls to fix the identity theft issues. Most policies that do offer this set a maximum reimbursement of around $500 or less, but others offer $2,000 or more.

Much like covering legal fees, this is not common for this type of insurance. However, it can be very useful, as many victims have to take excessive time off from work to complete all the forms and phone calls.

Fees and Deductibles

You normally have to pay a yearly fee of around $20 to $100 to have identity theft insurance. Some are more, but that is because they usually offer more services. The deductible is generally set to $100 to $250, depending on the policy. Others have excessively high deductibles, going up to $1,000, but this is very uncommon.

Total Protection Amounts

The total amount of protection you can get from identity theft insurance ranges from policy to policy, but you can expect it to range between $10,000 and $30,000, which should be more than enough for most victims. This coverage is dispersed between the copies, faxes, calls and lost wages, providing that all that protection is specified in the policy.

Check the Policy

Each policy is different, and each one comes with different forms of protection. To ensure you are getting what you want or need, read the policy terms and talk to the insurance agent. Some policies only cover calls and copies, while others cover attorney fees and lost wages. Each is different, so it is essential to check the terms for the policy’s features.

Should I Get This Insurance?

A lot of analysts and experts are split on this decision. Some say that the coverage is not enough to justify the bill, and that you can save the premium amounts to deal with this when it happens. When it comes to insurance that does not offer much protection, this may be right.

On the other hand, the ability to cover lost wages, one of the biggest problems with identity theft victims, can be very useful. Not only that, but some legal fee coverage can also be helpful, if the situation arises. In this case, analysts generally say that this insurance will afford you piece of mind, and you should get it.

Conclusion

Identity theft affects millions of people each year, and the costs of getting your credit back on track can be devastating. With this insurance policy, you can be reimbursed for some or all of those costs, making it helpful if this problem ever arises.