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Anyone can become a victim of identity theft. For that reason, many companies offer identity theft insurance to help victims with the costs associated with reclaiming their identity. There are many options when it comes to identity theft insurance, from selecting where to purchase it to choosing the right amount of coverage.

We put together some information to help you decide if identity theft insurance is right for you.

What does identity theft insurance cover?

Identity theft insurance policies vary in the amount and types of expenses they cover. It is important to understand the terms of the policy before committing. The following items represent commonly covered expenses within such a policy:

• Reimbursement for lost income
• Loan re-application fees
• Attorney fees
• Cost of notarizing fraud affidavits
• Cost of postage
• Cost of copies of documents
• Cost of long distance telephone calls associated with the identity theft incident
• Daycare or eldercare expenses

IMPORTANT: Most identity theft insurance policies cover only expenses associated with reclaiming your identity; they generally do NOT cover direct monetary losses resulting from identity theft.

How can I get it and how much does it cost?

Identity theft insurance can be purchased from a variety of sources including insurance agents, credit card issuers, credit bureaus, banks and credit unions, and identity theft protection companies. Generally, if you already have a homeowner’s or renter’s insurance policy, you can often add identity theft insurance to your policy for a lower cost than the cost of a single policy. The cost of identity theft insurance typically ranges from $25-$60 per year.

Other Considerations

Policy limits: Policy limits usually vary from $10,000 to $30,000 per policy period and generally include legal fees.
Income reimbursement limits: If your policy covers income reimbursement, find out whether there are any limitations on the number of days or the amount per day that will be covered. Some policies have a lost wages limit of $250 per day, while others provide for a weekly limit with a maximum number of weeks, such as $2,000 for 5 weeks maximum. Also, even if your insurance policy will cover lost wages, you may not be reimbursed for taking vacation or personal time to resolve an incident of identity theft.
Legal fee conditions: Verify the extent of legal fees covered by the policy and whether there are any special conditions that apply. Some policies may require that you use an approved attorney before the company will pay the legal fees.
Deductibles: Be aware that the terms of some identity theft insurance policies may require that you pay a deductible of $250 or more per policy period before you begin to recoup costs.

Consumer Tips

 
You may already be covered. Check to see if you already have identity theft insurance. You may be covered through your homeowner’s insurance policy, credit card company, or bank simply for being a customer.
Determine what matters to you. Compare policies based on the features that are important matter most to you. If you don’t want to pay a deductible, shop around for policies without deductibles. If you want your legal fees and lost wages covered, make sure the policy terms include those features. Above all, ask questions about each policy you are viewing to compare features and try to get the responses in writing.
Continue being cautious with your personal information. Identity theft insurance may not cover all the expenses associated with reclaiming your identity. Remember, the steps you take to prevent identity theft will help you avoid unnecessary stress and costs down the road.

For more information on identity theft, visit our website, call our Consumer Information Hotline at (617) 973-8787, or email us.

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