What Do You Know About Identity Theft Insurance?

Do not for one minute think this is protection against identity theft. 

Identity theft insurance is a special kind of insurance. This form of underwriting has become very popular in the past few years. Check your homeowners or renter’s insurance policy. There may be some form of identity theft insurance coverage already in place on your current policy. Inspect all the inclusions detail on any active policy before adding anything.

Beware of claims that identity theft insurance will cover your financial losses. 

In 2006, the National Association of Insurance Commissioners stated to a correspondent for MSNBC News that this special from of insurance coverage “does not cover direct monetary losses incurred as a result of identity theft.” The news article went on to define the loss repayment to cover only costs incurred in legal defense, mailing and document copy costs. Read the actual policy language and not just the advertisements about the policy.

Not all identity theft insurance policies are created equal.

Investigate what is actually covered and what is not before buying identity theft insurance. The first underwriting agency to offer coverage for loss of wages and damages in credit amounts owed was Travelers Insurance. Become familiar with underwriting laws and provisions available in your home state. National advertising does not take into account different law translations from state to state.

Read any disclaimers on the website of identity theft insurance company websites. Coverage for all claims or losses depends on actual policy provisions. Availability of coverage can depend on underwriting, qualifications and state regulations. The legalities disclaimer on Traveler’s Insurance coverage for identity theft insurance is quoted verbatim as follows:

“Coverage for all claims or losses depends on actual policy provisions. Availability of coverage can depend on underwriting, qualifications and state regulations.” 

Any form of identity theft insurance covers no residents of New York State. 

These terms are stated plainly within the terms and conditions of many credit monitoring or identity protection services that offer identity theft insurance as one of the elements of their individual membership packages. It pays to read the fine print of anything you are interested in enrolling in or signing up for. Not being able to cover the financial burden after suffering the trauma of loosing your identity could be a double whammy to anyone.

You need to look for valuable answers to questions that will arise from a victim. 

§         Is there a deductible? If so, how much money will you have to pay?

§         Is loss of wages covered and what is the daily limit of income?

§         What are the policy limits in dollar amounts? What limits are placed on each individual possible victim’s amounts of needed coverage?

§         Can you add the same or better identity theft insurance to your homeowners or renters insurance? If there is already coverage for such loss in place is it possible to increase the limits in effect?

§         Check into what forms of identity theft insurance may be offered through your bank.

§         Investigate all policies proclaiming identity theft insurance coverage through the Insurance Information Institute.

§         Check out every company offering identity theft insurance with the Better Business Bureau at www.bbb.org. Also be sure to check with any local consumer protection agency as well as your state’s Attorney General’s office.

Be sure you know what you are buying in the form of identity theft insurance. 

Even when you do have an acceptable form of coverage in place, this is not a reason to let down your guard. No one but you can protect your identity.