What Is Identity Theft Insurance and How Does It Work?

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Identity theft. People rarely expect it to happen to them, but when it does, they feel especially at a loss to know exactly what to do. However, identity theft has become so rampant nowadays. Fraudsters have designed new techniques and tricks to seize personal information from unsuspecting individuals. 

One thing you should know is that identity theft can be difficult to fix and that is why you need id theft insurance. If fraudsters open up credit cards in your name, or sell your personal information to the dark web, or even use your identity card when arrested by the police, it can be very expensive for you to resolve. According to https://www.javelinstrategy.com/ identity theft fraud cost customers a whopping $16.9 billion in the year 2019. 

The crimes identity thieves commit are usually financial in nature. For example, they can steal physical documents from a lost wallet, or they can obtain hardware from your laptop which is a rich source of all your personal information. They can also coax personal information from phone calls or obtain information via online scams such as phishing.

Once they have your information, they can go ahead and use stolen credit card numbers to steal money from the victim’s bank accounts. They can also open credit cards and obtain new bank loans. Victims of identity theft go through a lot of headaches and the road to recovery is often very long and frustrating. Depending on the extent of the damage, the correction of records can take anywhere from a few months to several years. Victims of identity theft often have low credit scores and some of them even find it hard to get a job. 

What Is Identity Theft Insurance?  

Identity theft insurance cover is simply a protective financial product designed to cover some of the expenses that arise after you have been defrauded. In simple terms, identity theft insurance coverage will reimburse you some of the money you have spent reclaiming your financial identity or fixing your credit report. The costs range from legal help to phone bills. The identity theft insurance company will also provide you with a specialist to help you through the restoration process. 

How Does Identity Theft Insurance Work? What Exactly Does It Cover? 

Identity theft thieves can use any method available to steal your personal information. You need to know that whichever method they use; whether it is by phishing, or collection of physical documents, you will be the one stuck with the financial damage they have caused. Identity theft insurance can help you in several ways depending on the policy you have taken.  For example, if you lost your wages because you took so much time off work to fix the mess identity thieves caused you, the policy can replace that income that you didn’t earn. 

The identity theft insurance policy will also cover notary fees, so if you need to get your documents verified or authorized by a notary, the policy will cover the cost for you. Your mailing costs and logistics to ensure that all the documents reach the right office will also be covered by the identity theft insurance policy.

Telephone bills accrued while dealing with this issue may also be covered. If you need child care during that season when you have to rectify all the problems caused by identity thieves, you can look for a policy that covers the cost of child care.  

It is also very important to find a policy that caters to legal fees. Court costs and attorney’s fees can rack up very fast and therefore it is important to get an insurance policy that covers those costs. 

How Can You Obtain Identity Theft Insurance?

There are several companies that offer identity theft insurance. But how does one choose the proper one? Ensure that you evaluate each company based on factors such as features, price, company reputation, and protection plans. You can obtain identity theft insurance from the company that offers your homeowners insurance or you can get it from companies that offer identity theft insurance as a sole product. 

An identity theft protection service that offers monitoring and real-time alerts, dark web surveillance, three-bureau credit monitoring, and up to $1 million insurance coverage to replace stolen funds and lost wages is a good policy to get. 

Conclusion

As much as it is comforting to know that you are protected by an insurance policy, you must remember that security starts with you. Make sure that you use strong passwords and never incorporate your birthdate or phone number on your password. 

You should also be very careful on whom you give personal information on the phone so that you do not fall victim to phishers. If you ever get communication from people claiming that they work at your bank, and are requesting you to update your personal information via a link that they have sent to you, delete that link immediately and inform your bank through the official phone number or website.

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