Identity Theft Insurance

Identity Theft Avoidance

A Federal Trade Commission (FTC) survey from 2007 showed that 8.3 million American adults, or 3.7% of American adults, were victims of identity theft in 2005, and that number is rising. In at least half of the incidents, thieves obtained goods or services worth $500 or less; however in 10 percent of cases, thieves got at least $6,000 worth of goods or services. This is when you want identity theft insurance.

Fifty-six percent of all victims were unable to provide any information on how their personal information was stolen. Identity theft thieves use personal information to impersonate a victim, stealing from bank accounts, establishing phony insurance policies, opening unauthorized credit cards or obtaining unauthorized bank loans.

With all the publicity about identity theft— the fastest-growing consumer crime in the country — some people are willing to pay a few dollars a month to buy peace of mind.

Identity theft insurance is something of a misnomer. Too many people think that if someone steals money from their bank account, the identity theft insurance company will repay them. But this is not true for most policies. The typical identity theft insurance policy will not pay for stolen money but only for expenses associated with straightening out the mess. Actual losses require a separate very specific policy.

Whatever statistic you want to use, the major cost is definitely the hassle factor — the many many hours spent talking to your creditors, credit reporting bureau and law enforcement agencies. The reason this is so frustrating is that they tend to give identity theft short shrift compared to violent crime. There can also be the intangible costs of denied loans or higher interest rates because of a stolen identity. There have been people that have said they have been turned down for new jobs. This is the reason to get identity theft insurance.

One of the ways to handle this is by adding an endorsement to homeowners insurance. This would provide identity theft expense reimbursement and they are usually available. They typically cost $50 to $70 for $15,000 to $25,000 in coverage. Everyone is different though. Just ask us to get you a quote for identity theft insurance on homeowners insurance.

People earning more than $150,000 a year are the most likely targets. Those who earn less than $15,000 are most likely to suffer long-lasting damage, as they usually have fewer resources to use in repairing their credit standing. Young adults between 18 and 29 are the most frequent victims, probably because they are the least likely to take such safeguards as shredding documents and using firewalls on computers. It is suggested that college students take a crosscut shredder and a lock box large enough to hold a laptop, loaded with current security software.College students should have a renters policy (since they won't likely have homeowners insurance) with identity theft insurance.

Tips for Avoiding Identity Theft Fraud

• Keep the amount of personal information in your purse to the minimum. Avoid carrying additional credit cards, your social security card or passport unless necessary. You might put this info into a password protected phone app.
• Guard credit cards when making purchases. Be careful using ATM machines or making long distance phone calls with phone cards. Don’t fall prey to wandering eyes.
• Always take credit card or ATM receipts. Don’t throw them into public trash containers, leave them on the counter.
• Don't give out personal information. Whether on the phone, through the mail or over the Internet, don’t give out any personal information unless you have initiated the contact or are sure you know who you are dealing with. They need a secure line.
• Proceed with caution when shopping online. Use only authenticated websites to do business online. Always check for the locked padlock image on your browser’s status bar or look for "https://" in your browser window. If you have any concerns about the authenticity of a Web page, contact the owner of the site to confirm the URL.
• Make sure you have firewall, anti-spyware and anti-virus programs installed on your computer. Update these programs regularly.
• Go to Freecreditreport.com. A new law that took effect December 1, 2004, entitles you to one free credit report per year. Your credit report contains information on where you work and live, the credit accounts that have been opened in your name, how you pay your bills and whether you've been sued, arrested or filed for bankruptcy.
• Place passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother's maiden name, your birth date, any part of your Social Security number or phone number, or any series of consecutive numbers. If you suspect a problem with your credit card, change your password.
• Shred any documents containing personal information such as credit card numbers, bank statements, charge receipts or credit card applications & homeowners insurance.