Insurance Basics: What is Identity Theft Insurance?
Identity theft is a form of fraud that occurs when someone uses information about you -- such as credit card numbers, your address, or bank account numbers -- without your permission. According to the Bureau of Justice Statistics, nearly 18,000,000 people were victims of some form of identity theft in 2014. That's nearly 10% of the population.
Unfortunately, account holders are held responsible for paying off what a thief charges on their accounts. When someone's identity is stolen, expenses for legal fees and other administrative costs for getting their accounts in order and clearing their name can really pile up. The good news is, a modern type of insurance called an identity theft policy may cover these costs should you be the victim of identity theft. Identity theft insurance reimburses policyholders the costs related to recovering from identity theft, not the dollar amount stolen as the result of the thief's actions. Identify theft insurance typically covers:
- The cost of phone bills related to resolving the theft
- Lost wages that you incur while resolving the theft
- The cost of using notaries in the process of resolving the theft
- The cost of sending correspondence via certified mail while resolving the theft
No one is immune from the risk of identity theft. It's a good idea to check your credit report every few months to reduce the risk, so start now if you don't already do so! It's also important for consumers to look over their accounts' statements regularly in order to catch anything untoward. Additionally, be wary of any emails that ask for personal information as phishing is one-way identity thieves obtain information about their victims.