What is Identity Theft Insurance?

Considering that Identity Theft is the fastest growing consumer crime it is no surprise that Identity Theft Insurance has become a hot product. Identity Theft Insurance is not exactly insurance in the sense that we're used to thinking of insurance. It does not cover damages from identity theft but rather reimburses the costs involved in restoring your identity. These usually involve lost wages, phone costs, notary and certified mailing expenses, and in some cases the use of an investigator or attorney.

What should I look for?

Lost Wages

Probably the most beneficial aspect of these insurance policies is the reimbursement for lost wages. Recovering from having your identity stolen is a time consuming process. The average identity theft victim spends 22 days to repair the damage from identity theft. Look carefully at the limit on lost wages as well as if it requires you to use earned sick or vacation time.

Deductible

Look closely at the deductible. If the deductible is too large than is there little chance you will ever benefit from the policy regardless if the coverage is one million or twenty thousand. On average most identity victims spend about $1,000.00 to repair their credit. If your deductible is too high, your expenses may never be able to justify a claim.

What doesn't it cover?

Most Identity Theft Insurance policies do not cover any financial or physical losses resulting from an identity theft. If an identity thief steals your identity and gains access to your bank account, those losses will not be covered. However in most cases, financial institutions will take responsibility for unauthorized access to your accounts.

Who do we like?

Most people have heard of Lifelock's 1 Million Service Guarantee but if you read the fine print you will find that there is no coverage for lost wages, probably the greatest expense a victim of identity theft will incur. In fact, we find both Equifax's and IdentityGuard's $20,000 Identity Theft Insurance policies (underwritten by Travelers Casualty and Surety Company for America) superior to Lifelock's 1 Million Total Service Guarantee. Both those policies cover lost wages but Trusted ID's $1,000,000. Service Warranty offer's more than double the wage limit ($5,000 vs. $2,000). In most cases, victims of identity theft spent countless hours trying to repair their credit by themselves and do not require an attorney. It is simply filling out paperwork and contacting creditors and law enforcement agencies and while certainly time consuming, it will usually not generate 1 Million Dollars in reimbursements. In fact the average spent on restoring your credit is $1,000.