How to Purchase Identity Theft Insurance

Identity theft insurance has come about over the past few years due to the incline in identity theft cases.  Every one in twenty three Americans will become a victim of identity theft each year.  With such startling numbers, it can be a scary thing for many consumers to think about.  One thing that is out there for consumers is identity theft insurance.  It is a common misconception that identity theft insurance will prevent theft from occurring.  That is not the purpose of this insurance.  Identity theft insurance helps consumers with the identity theft recovery process.  

Since no identity theft insurance company or policy is the same, there are a few key points you should look for prior to actually signing with a company. 

 How much coverage you are getting for the price is always important.  We all have a budget, but will the price you can afford to pay for this insurance each month even be worth purchasing?  Always look into just what you get for your money.  This will include reimbursement amounts and what is actually covered in the policy.  Some will replace lost wages, while other companies will only pay for the cost to recover from identity theft and nothing else in between. Always check to see what kind of deductible you will have with your identity theft recovery policy. If the deductible is over $500.00, that may be a lot of cash for the average consumer to come up with in a time of need. Be sure that you can afford your deductible. Check into what caps are on your policy as well. Some policies will cap users at a $5,000.00 payout total. 

Though they can replace lost wages, reimburse fees, etc., that $5,000.00 can go rather quickly. Be sure that the cap is something that is worth the policy to begin with. See if your identity theft insurance will reimburse you for stolen money. If someone breaks into your back account and drains it, will your insurance reimburse the funds that were there? Some will only cover costs to fix your credit history, not replace things that were actually lost or stolen. Look to see what your policy states about effective dates. Say you sign up with a service, only to realize that two months ago someone stole your social security number.  Will your policy cover an event that occurred prior to them becoming your insurance company? 

A lot of us are unaware that we are victims of identity fraud. It can take months for it to appear on your credit report; therefore it can be hard to determine if you are already a victim prior to registering for insurance. Always know what exclusions come with your policy. If a family member is the one that stole your identity, there are some insurance carriers that will actually not reimburse for that type of event. Be sure that you are fully covered no matter who steals your identity. Another important thing to make sure you get is a personal counselor.  In the event your identity is stolen, will a single person be there to help you through the entire identity theft recovery process, or will you be dealing with multiple people who just pass around your case file through the office? There is something to be said about a company that is willing to work with you one-on-one.

Identity theft insurance can be a good thing if you think you need it. If you can afford to shell out the few thousands of dollars it takes to repair your identity theft on your own, then you may not need a personal insurance for it. Though most of us can safely say we cannot afford to fix our credit ourselves, so perhaps identity theft insurance will be good for you to try.