Identity Theft Insurance
There’s a lot of interest in identity theft insurance. Part of the reason is because identity theft is increasing. You hear more and more often about security breaches where people’s names and social security numbers are stolen. It’s also partly because identity theft insurance costs are very low.
Some folks think it’s best to purchase a $25 identity theft insurance policy than to have to worry about the consequences of an increasingly electronically driven lifestyle. So you have companies like MetLife Auto & Home, American International Group, Travelers, Farmers Group, etc. offering identity theft insurance.
Aside from entry-level $25 policies (which offer $15,000 worth of coverage), these companies also offer $50-$60 policies (approximately $25,000 in coverage). All these factors have combined to make identity theft insurance the fastest growing insurance product in years.
But do you really need identity theft insurance? Well if you ask your insurance company (or surf their website), they’d probably make a pretty convincing case for buying some. What you don’t hear to often is the case AGAINST buying identity theft insurance.
Identity Theft Insurance – Why Experts Say You May Not Need It?
Identity theft insurance was designed to pay for the cost of fixing your credit standing. This may include reimbursements for notary costs, telephone bills, certified mailing expenses, lost wages, loan re-application fees, and certain legal fees.
Should you get identity theft insurance?
Critics offer these five reasons you don’t need it:
1. It may increase your risk of being victimized because it makes you complacent.
2. The seemingly low policy cost is not good value compared to the risks.
3. Your bank or credit card company will cover losses that are a direct result of identity fraud on an existing account.
4. It won’t fix the poor credit rating or erase the criminal record generated by the theft.
5. You’d still have to go through the long, tiresome process of fixing the problem yourself.
Insurance is a good thing to have for protection from the unknown. Coverages for health, life, disability, auto and home are critical. Identity theft insurance is more like shutting the barn doors after the horses got loose. The only thing that the American insurance industry and critics of ID theft insurance agree on is this: the best insurance is still prevention.
Here’s an easy way to prevent identity theft.