Identity theft is a serious crime that can cause considerable damage to an individual’s financial and personal life. According to a study by Javelin Strategy and Research, over 14 million people were victims of identity theft in 2018, and the total losses were worth $1.7 billion. This shows how rampant and costly identity theft has become in recent years. One way to protect yourself against this crime is by purchasing identity theft insurance. In this article, we’ll dive deeper into what identity theft insurance is, how it works, and why you should consider buying it.
What is Identity Theft Insurance?
Identity theft insurance is a type of insurance policy that covers financial losses resulting from identity theft as well as the costs incurred in restoring your identity. It’s an extra layer of protection that helps you recover from the financial, emotional, and legal aspects of identity theft. Some of the common expenses covered by identity theft insurance include:
- Lost wages
- Legal fees
- Credit report fees
- Phone bills
- Postage fees
- Affidavit fees
- Travel expenses
How Does Identity Theft Insurance Work?
The process of purchasing identity theft insurance is straightforward. First, you need to find a reputable insurance provider that offers identity theft insurance as one of its products. You can compare the policies and rates from multiple providers to find the one that best fits your needs and budget. The cost of the insurance will depend on several factors, including your state of residence, credit score, and coverage limit.
Once you’ve bought the policy, you’ll receive a set of instructions on what to do if you suspect that your identity has been stolen. These instructions will guide you through the process of reporting the theft to the relevant authorities, such as the Federal Trade Commission (FTC), credit bureaus, and law enforcement. You’ll also be assigned a case manager who will assist you in the recovery process.
If a theft occurs, you’ll first need to file a police report and notify your insurance provider. Your insurance provider will then investigate the matter and determine the extent of the damage. If your policy covers the losses, your insurance provider will reimburse you for the costs incurred in restoring your identity and settling any fraudulent charges. You may need to provide documentation and evidence to support your claim.
Why Should You Consider Buying Identity Theft Insurance?
The main benefit of purchasing identity theft insurance is that it provides an additional layer of protection against identity theft. Even if you follow all the recommended best practices to prevent identity theft, such as using strong passwords and avoiding suspicious websites, you can still become a victim of this crime. Identity theft insurance provides financial and legal support when you need it the most.
Another benefit of identity theft insurance is that it can help you recover from the emotional stress of identity theft. The process of restoring your identity can be long and stressful, and it can be even more challenging if you have to deal with the financial loss on top of it. Identity theft insurance helps alleviate some of the stress by providing assistance throughout the recovery process.
Moreover, identity theft insurance saves you time and effort by handling most of the recovery process on your behalf. You won’t have to spend hours researching the best course of action or contacting multiple agencies and institutions to fix the damage. Your insurance provider will take care of most of the work, allowing you to focus on other important aspects of your life.
Conclusion
Identity theft is a growing problem that can cause significant financial and personal damage. Identity theft insurance is an excellent way to reduce your risk and protect yourself against the losses associated with this crime. It’s an affordable and straightforward insurance policy that provides peace of mind and support when you need it the most. As you consider ways to safeguard yourself against identity theft, be sure to include identity theft insurance as part of your overall plan.