CC Flickr.com/Rosie O’Beirne
Although you can take steps to help ensure your identity remains safe from thieves, there is always the possibility that you won’t be successful. If an identity thief makes off with your credit card, or merely its number, or happens upon your Social Security number, your financial status and credit rating could suffer greatly. You may want to consider adding identity theft insurance to your arsenal. Following are a few tips on how identity theft insurance works.
What Is Identity Theft Insurance?
Unlike other forms of insurance, identity theft insurance will generally not reimburse you for any losses associated with identity theft. Instead, an identity theft policy will help defray the costs of trying to correct the harm done by an identity thief. For example, if you’re in a car accident your insurance company will pay you a sum of cash equal to the amount of the damage, which you can use to pay for repairs to the vehicle. Depending on the language of the policy your compensation could include the cost of a rental car while yours is being repaired, along with other considerations. The coverage is limited only by what you’re willing to pay for. However, identity theft insurance may not actually reimburse you for the damage a thief does, or what they buy, but it will help pay for legal costs arising from the theft and other financial expenditures associated with clearing up the problem, such as long-distance telephone calls or expenses related to getting copies of financial documents or other documents that may be needed to repair the damage.
Are You Already Covered?
Often when you speak to an insurance agent about identity theft coverage, they’ll tell you that you’re already covered under a homeowner’s policy. While this is partially true–your auto owner’s or homeowner’s policy may contain a form of identity theft protection by supplying you with the help of a fraud expert if your identity is stolen, the coverage may be limited. It would be advisable to sit down with your insurance agent and make sure you are adequately covered in the event your identity is compromised. They will undoubtedly advise you to take identity theft prevention measures. But no matter how careful you are, or what steps you’ve taken to prevent your identity from being stolen, there is always the chance you could be careless, or simply outwitted by a professional identity thief. If that happens, you need to be prepared with an identity theft policy in effect.
Identity Theft Insurance
If you’ve taken every step you can to prevent your identity from being stolen, and your present auto owner’s or homeowner’s policies don’t contain language that will help you if your identity is pilfered, or you feel your present coverage is inadequate, then you may want to take out identity theft insurance. Even if your present policies will provide coverage, it may not be enough to help you reestablish your credit rating or financial health. Buying dedicated identity theft insurance is no different than taking out any other type of insurance policy. You should decide beforehand how much and what type of coverage you require, then sit down and talk to your insurance agent about providing the coverage that will provide you with the peace of mind necessary to get on with your life if the worst happens and someone steals your identity.
Repairing the Damage
One of the hardest aspects to deal with regarding identity theft is trying to repair the damage done by having your identity stolen. A thief could run up a tremendous number of charges on your credit card before you realize it’s gone, or they may even try and establish a line of credit in your name with a lending institution, which will damage your credit rating and could prevent you from getting a loan for a car or home. The consequences associated with identity theft go far beyond a mere annoyance; it could impact your life for decades to come. Most of the financial problems associated with identity theft will have to be dealt with through the lending institutions you normally deal with, which can be extremely frustrating. Carrying identity theft insurance can help with the cost associated with regaining your identity, and may even cover such things as the wages you may lose while you’re spending your time trying to re-establish your own identity.
