Do You Need ID Theft Insurance?

While you’ve been busy with your day-to-day life someone could have stolen your personal information and racked up debts or committed fraud – all with your name on it. What happens then can be anything from being denied employment, credit or even being arrested for a crime you didn’t commit. Identity theft is that serious.

According to a survey conducted by the FTC (Federal Trade and Commission) 4.6% of Americans involved in the survey responded that they had been a victim of ID theft within the past year. That means about 10 million Americans dealt with some form of identity theft.

How can you help yourself if you are the victim of ID theft? We have listed many ways in our article on How to Guard Against Identy Theft. Following those tips can go a long way in making sure you're not a victim of identity theft.

But, many people want more protection. They want identity theft insurance. But, what exactly is identity theft insurance and how does it work? And, more importantly, do you need it?

Identity theft insurance requires that you pay a small premium every month. In return, if you have your identity stolen, the insurance company pays for many things involved in the process of regaining your identity. This includes phone bills, mailing costs, lost wages, attorney fees, and other expenses. It is important to remember, however, that these companies won't reimburse you for the money that was stolen from you.  They only help you with some of the expenses you may incur due to dealing with the theft.

If you're trying to decide whether to purchase identity theft insurance, consider this: the Federal Trade Commision has stated that the average victim spends less than $1,500 to recover from ID Theft.  If you do purchase the insurance, your deductible would have to be low in order for you to benefit from the plan. So, you have to weigh the cost of having a low-deductible plan against the amount an average victim has to spend.

Where to Begin?

If you decide that having identity theft insurance is worth it, then, where do you begin?  Well, the first place to start is your own insurance company. Who knows, you may already be covered. So, check your own homeowner's plan, and, if the costs incurred with identity theft are not included, call your insurance company and see if they offer a plan you can include with your homeowner's plan.

American Express also includes some form of identity theft services to their card members. If you have an American Express card, go to their website and check out what their program offers.

Remember, if you're credit card was stolen and someone begins purchasing items with it, notify the credit card company immediately. You are only liable for $50 of charges if you report the theft soon after it has occured.

Some Identity Theft Resources:

Here are a couple places to go for help preventing identity theft and for help when you feel you've become a victim of identity theft.

For help preventing identity theft:

Our page on How to Guard Against Identity Theft

AnnualCreditReport.com, which allows you to monitor your credit report at the big three credit reporting agencies. You are entitled to a free report each year from each of the three reporting agencies, so do stagger your requests every 4 months. You can then get coverage all year round from at least one of the companies.

If You're a Victim of Identity Theft:

You can go to the FTC website at http://www.ftc.gov/bcp/edu/microsites/idtheft/ to learn what to do if your information has been stolen.  They can guide you through the process of repairing your credit, and other matters that may come up.

Synonyms:  idenity, identy,  ientity, idennity, are typos and mispellings for "identity."  Teft, tehft,  thft, theeft, thet, thetf, thefft, thef, and theftt are typos and mispellings for "theft."