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Identity theft insurance is a fast growing insurance product. Hardly few years ago, the losses due to identity theft cost the financial institutions $ 48 billion. Individual victims paid $ 5 billion in out-of-pocket expenses to arrest the damage and prove that they are victims and not culprits. The Javelin Strategy and Research survey report about 9.3 million adult Americans were made victims of identity theft in 2004 and an average victim spent about 28 hours trying to restore his/her credit record and spent about $ 750 as out-of-pocket expenses.
Taking identity theft insurance
Identity theft insurance provides reimbursement to crime victims for the cost incurred to restore their identities. Identity theft insurance coverage is sold either as a stand-alone policy or part of homeowners' insurance policy. Identity theft insurance provides for expenses such as reimbursement of expenses for phone bills (especially long distance calls), lost wages, notary and certified costs and attorney's fees.
The financial institutions offer identity theft insurance. They are willing to reimburse for our-of-pocket expenses and also help in the process of contacting creditors and writing affidavits and filing reports. Identity theft insurance is being offered by some of the leading financial institutions. Typically identity theft insurance would cost anywhere between $ 25 to $ 50 for $ 15000 to $ 25000 worth of coverage.
The primary danger here is devastation of your credit rating. Identity theft insurance cannot do anything about the grief that such devastation causes to the individuals. When a car or a house is damaged, insurance pays for repairs. But there is no insurance for repair of identity. Identity theft insurance does not fix credit standing or clear up the criminal record that is acquired by a person unwittingly. It only pays for the expenses incurred. It does not cover direct monetary losses that are resultant of theft of identity.
Identity theft insurance will not and cannot prevent one from being an identity theft victim. It only helps in recovery of money through reimbursement for some of the losses associated with the identity theft. Whether to purchase an identity theft insurance or not is a purely personal decision of an individual.
Identity theft insurance policy
Beware of unknown companies that market identity theft insurance policies. It is always better to deal with reputed companies who are in the market for several years.
Check the age limit restrictions in the identity theft insurance cover.
It is advisable to check whether there is any restriction on the quantum of money that can to be spent for expenses and if so the quantum permitted.
There are certain identity theft insurance policies where the reimbursement to victims of stolen identities for expenses incurred is upto $ 25000 with no deductibles.
Check if the policy covers legal bills and lost wages due to the time away from work. Income protection coverage clause under identity theft insurance policy provides for lost wages reimbursement.
Identity theft coverage does not cover charges on your credit card, but will reimburse you for the time it takes to restore your credit. This would cover time taken away from work to make calls and obtain new forms of identity, some attorney fees, notary fees, postage fees, loan reapplication fees and lost wages.
Does the identity theft policy offer services of a consumer fraud specialist who can help the victim reclaim the lost/tarnished identity?