{"id":352685,"date":"2016-04-04T10:42:08","date_gmt":"2016-04-04T15:42:08","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/consumer\/online-scams\/what-is-identity-theft-insurance-and-do-i-need-it.html"},"modified":"2016-06-20T20:20:50","modified_gmt":"2016-06-21T01:20:50","slug":"what-is-identity-theft-insurance-and-do-i-need-it","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/consumer\/online-scams\/what-is-identity-theft-insurance-and-do-i-need-it.html","title":{"rendered":"What Is Identity Theft Insurance and Do I Need It?"},"content":{"rendered":"\n
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What Is Identity Theft Insurance and Do I Need It?<\/h1>\n
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Created by FindLaw’s team<\/a> of legal writers and editors<\/i><\/p>\n\n | Last updated\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Identity theft is the number one consumer complaint in America. According to the Bureau of Justice Statistics, ID theft affected 16.6 million American adults<\/a> in 2012. That\u2019s approximately 7% of the adult population \u2013 no small number. Many insurance companies have sought to address consumer concerns by selling identity theft insurance. This article focuses on what identity theft insurance is and whether it\u2019s right for you.<\/p>\n

How Does Identity Theft Work?<\/h2>\n

Stealing your credit card number, bank account information, driver\u2019s license number, Social Security number, or other personal identifying information can allow thieves to do all sorts of things. They can make purchases on your cards, take out loans in your name, and do other things to enrich themselves and ruin your credit<\/a>.<\/p>\n

More serious identity theft crimes include opening accounts in your name, draining funds in your name such as Medicare and Social Security benefits, and using your details to set up fake identities for other people.<\/p>\n

Some thieves will sell your information to other criminals who may even commit crimes while using your identification as cover<\/a>. There\u2019s really no limit to what thieves can do with a stolen identity \u2013 the criminal mind can be quite enterprising.<\/p>\n

Protecting Yourself<\/h2>\n

Consumers are not totally unprotected. The most common form of identity theft (85% of all thefts) involves stealing credit card or bank account information. Generally, your bank or credit card issuer works to prevent fraudulent purchases and steps in when your details are stolen.<\/p>\n

There are also some common sense precautions<\/a> everyone can take to avoid identity theft. Shredding documents headed for the recycling bin, keeping your Social Security and driver\u2019s license numbers private, and monitoring your bank accounts and other assets can go a long way. It\u2019s only when things do go wrong that identity theft insurance comes into play.<\/p>\n

What Is Identity Theft Insurance?<\/h2>\n

There\u2019s a common misconception about identity theft insurance<\/a>. It doesn\u2019t cover your financial losses from identity theft. Rather, identity theft insurance offers to cover the expense required to help you deal with identity theft after the fact.<\/p>\n

These expenses might include the cost of making phone calls, writing letters, and dealing with banks, creditors, and government agencies. Some insurance providers offer help and expertise in dealing with identity theft and will cover your time off work spent dealing with it. Most will offer some sort of credit monitoring, often at an additional cost. But identity theft insurance is not about insuring against possible loss due to identity theft. It simply insures your time and energy spent dealing with identity theft after it\u2019s already occurred.<\/p>\n

What Should I Know About Identity Theft Insurance?<\/h2>\n

Buying any kind of insurance should involve reading the fine print. For identity theft insurance, the devil can be in the details. You should ask some key questions when shopping for a policy:<\/p>\n

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  1. Do You Already Have Protection?<\/u> Many homeowners\u2019 insurance plans offer protection for identity theft. You should first determine whether you\u2019re already covered.<\/li>\n
  2. What is the policy limit?<\/u> Most identity theft insurance plans max out at around $15,000. And again, this doesn\u2019t cover losses from identity theft, only the costs of addressing identity theft.<\/li>\n
  3. What is the deductible?<\/u>  An insurance plan leaves the consumer liable for the amount of the deductible<\/a>. For identity theft, the deductible can often exceed the cost of dealing with it entirely.<\/li>\n
  4. Check the Details on Major Costs<\/u>. The insurance business depends on having lots of customers but few claimants. Capping reimbursements for major costs such as lost wages and legal fees is a common way to reduce payouts.<\/li>\n
  5. Read the Fine Print.<\/u> You should always take the time to read the details of any insurance plan. Besides knowing what you\u2019re paying for, you should also know what exactly it is that you\u2019re entitled to should things go wrong.<\/li>\n<\/ol>\n

    Should I Buy Identity Theft Insurance?<\/h2>\n

    People tend to have strong views on identity theft insurance<\/a>. In January 2013, Consumer Reports made a splash by recommending that consumers not purchase ID-theft protection<\/a> services at all. The magazine, a leader in the consumer protection field, cited the limited coverage such services provide and the relatively small cost of dealing with most identity theft cases. Services such as identity theft insurance, it concluded, simply weren\u2019t worth it. This recommendation drew counter-articles from elsewhere, most underlining the potentially serious effects of identity theft<\/a>.<\/p>\n

    There\u2019s no right or wrong answer for identity theft insurance. If identity theft is a major concern for you and if you think the cost and hassle of dealing with it are worth insuring against, then buying identity theft insurance may be a good choice. If you were hoping to insure against losses from identity theft or don\u2019t have any particular concern about your identity being stolen, then buying identity theft insurance may not be worth it. The decision is yours alone.<\/p>\n

    Getting Legal Help<\/h2>\n

    Identity theft is a major concern. It can damage credit ratings, jeopardize financial plans, and generally create long-term hassles for its victims. You can speak with a consumer protection attorney<\/a> to learn more about identity theft and the law.<\/p>\n

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