Identity theft insurance, or protection, is a relatively new insurance offering that is focused on helping an individual recover financially when his or her identity is stolen by someone else. Often combined with other identity theft services such as credit monitoring, identity theft insurance is designed to handle any residual charges and debts that were incurred as a result of the theft. However, it is important to note that identity theft insurance may not provide any coverage if certain factors are involved in the theft activity.
One of the questions consumers ask is if the various types of identity theft insurances are really worth the cost of the premium. This is a legitimate question that can have more than one answer. In order to determine if identity theft insurance is worth the cost, it is important to consider the coverage provided by a specific program. Along with the specific coverage offered, the consumer should also be aware of any identity theft protection that is already in place through various creditors. Understanding any existing laws in the country or origin that impact the issue of identity theft is also an important factor.
While there is no doubt that identity theft insurance in general is worth considering, it is important to note that not all ID theft insurance programs offer the same quality of protection. For example, some identity theft programs will pay out a claim when the identity thief is a relative. Other theft insurance plans will honor claims regardless of the identity of the thief or his or her connection to the victim.
Another limitation that may vary in the coverage offered by identity theft insurance has to do with what amount of theft coverage is already provided by other sources. For example, if a credit card company offers some amount of protection to a customer, the insurance program will not pay anything until the company’s provider has paid the maximum amount allowed by that coverage. In many cases, this may be enough to cover all the expenses, making it unnecessary for the identity theft insurance provider to pay out anything at all.
Even when the identity theft insurance is the only type of protection in place, that does not necessarily mean that your insurance provider will interact with your creditors and others to resolve the damage done. Some ID protection programs will require the victim to interact directly with creditors to arrange any type of compensation. This means more documents to file and longer periods to wait until the claims are approved, returned for more information, or rejected for some reason. In the meantime, the victim is left to work out payment arrangements with the creditors.
Identity theft insurance does often cover legal services needed to straighten out the damage caused by having an identity stolen. The ID theft insurance may also have some limited coverage when it comes to lost wages or salary, although this is usually a relatively small amount. Thus, while the insurance does provide some assistance, that assistance may be minimal and may not be worth the annual cost of maintaining the coverage.
While some consumers find a degree of value and comfort in having identity theft insurance, others maintain that taking proactive measures to protect oneself from identity theft are a better investment of time and money. When these preemptive measures are taken, and when there is already a fair amount of protection in place due to applicable laws and services provided by creditors, the consumer may find that placing the amount of that monthly or annual premium in some type of interest bearing account will be a much better option.
