Identity theft remains one of the fastest growing crimes in the country today. Identity thieves have developed a number of ways to obtain your information - from the simple theft of a wallet to elaborate internet-based scams. Simply put, identity theft insurance pays for the costs associated with identity theft and the time consuming process of cleaning up the mess left behind when somebody steals your identity. It does not reimburse you for the money that is stolen from you. Some insurance companies offer this coverage as part of your homeowners insurance or it can be added to your policy by endorsement.
Coverage varies by insurance company. The following is a list of coverages that are available.
Helping to Get Your Identity Back
For many victims, the most stressful part of identity theft is the complicated process of reclaiming their identities and repairing their damaged credit. Some companies give you access to a consumer fraud specialist who can guide you through the process of restoring your name and credit record, including:
- Obtaining a free credit report from the three main credit bureaus
- Provide you with ongoing monitoring and alerts of fraudulent activity associated with your name, address, social security number and date of birth
- Enrolling you in six months of daily credit monitoring
- Completing dispute letters on your behalf for approval and signature
- Assist in identifying fraudulent accounts
- Contact your creditors on your behalf
- Assist in replacing driver's license, passport, social security card and any other identification documents
- Provide an emergency cash advance when needed, if theft occurs away from home
- Help you untangle the consequences of medical ID theft.
Reimburses Expenses to Restore Your Credit
Reimburses you for the expenses you can incur in your resolution efforts. These include:
- Lost wages as a result of time taken off from work to deal with the identity theft. Limit is typically $250 per day, total of $5,000.
- Notary and certified mailing charges for completing and delivering fraud affidavits.
- Fees to reapply for loans that were denied due to erroneous credit information caused by the identity theft.
- Cost of long distance telephone charges
- Daycare and eldercare expenses.
- Attorney fees
The annual cost to add identity theft to your homeowners insurance policy typically runs between $25-65 per year.
For valuable information on how to protect yourself from identity theft, the National Crime Prevention Council offers a free booklet called "Preventing Identity Theft: a Guide for Consumers".
Please feel free to leave any questions or comments and we will respond promptly.