Identity Theft Insurance

Last updated: March 29, 2016

Did You Know You Can Insure Against Identity Theft?

If you are a victim of identity theft, it can be costly to reestablish your credit and identity. Several companies are now offering identity theft insurance. 

  • This generally costs between $25 and $60 per year. 
  • Identity theft insurance cannot protect you from becoming a victim of identity theft. 
  • It does not cover direct money you lose because of identity theft. 

Instead, identity theft insurance provides coverage for the cost of reclaiming your financial identity. This includes:

  • The costs of making phone calls,

  • Making copies,

  • Mailing documents,

  • Taking time off from work without pay (lost wages),

  • And hiring an attorney.

Things To Consider

  • Find out what the policy limits are.

    • Most identity theft insurance policies have policy limits of $10,000 - $15,000.

  • Find out if there is a deductible.

    • Some policies require you to pay the first $100 - $500 of costs incurred for reclaiming your financial identity.

  • Remember, identity theft insurance does not cover direct monetary losses.

  • If the policy covers lost wages, verify what limits apply and what triggers this coverage.

    • If you are a salaried employee or are required to request vacation time in the event of a work absence associated with reclaiming your financial identity, you may not have unpaid leave and lost wages.

  • If the policy covers legal fees, verify what limits apply and if legal work needs to be pre-approved by the insurer.

Before You Buy

Check to see if your current homeowner insurance includes identity theft insurance.

  • If not, you may be able to add identity theft insurance to your homeowner’s policy for a small fee. 
  • You can also buy a stand-alone policy from another insurer, bank, or credit card company.

As with any insurance product, make sure you understand what you are purchasing. And compare the product’s price, coverage, and deductibles among multiple insurers.

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