Identity Fraud and Consumer Theft

Identity Theft Insurance

Would it be in my best interest to purchase identity theft insurance?

 

Just what is identity theft insurance, anyway? Well, it is a new kind of insurance that companies are offering that cover lost wages when you have to deal with an identity theft (if you are the victim, you will spend hours, if not days, off work sorting through all the identity theft issues), and whatever it costs to fix your credit card, which includes all mailings, telephone calls and attorney fees. There are a few facts you should know before thinking about buying identity theft insurance, though:

  1. Most identity theft victims don’t lose more than $500 when their identity is stolen.
  2. You hardly ever require an attorney when you are the victim of identity theft.
  3. Only some time have to be taken off from work to fix your credit record. The higher cost will be in postage, as you should use certified mail, and long-distance phone calls.
  4. Many identity theft insurance companies don’t offer more than a few thousand dollars if you lose wages.
  5. Most identity theft involves stolen credit cards! And when you have credit card fraud, you are only rarely responsible for any charges you didn’t make. Federal law dictates that anyone whose card has been used fraudulently is only liable for $50 of the total charges, and sometimes the credit card companies will even waive that charge.

So, knowing the facts above - Should you buy identity theft insurance or not? Well, looking at your own personal situation will give you some guidance. If you tend to lose your purse or wallet, and you carry a lot of personal information in there like credit cards, drivers license, Social Security card, and passport, then buying the identity theft insurance may be worth the money. However, if you are only worried about an identity thief running up high charges on your credit cards, it may not be worth the cost.

 

As with any company you buy policies from…shop around. If you do become the victim of identity theft, you don’t want to become a victim a second time because you purchased worthless insurance.