Do You Need Identity Theft Insurance?
The 4-1-1 on Identity Theft Insurance
With identity theft becoming such an increasingly popular crime, more and more people find themselves wondering if identity theft insurance is needed. After all, you can take all of the right steps to reduce your risk of identity theft, but nothing can completely prevent it. The question is, will identity theft insurance really help if you become the next victim? Here's what you need to know.
What is Identity Theft Insurance?
Identity theft insurance will protect you from any losses you might encounter should you become a victim of the crime. This includes costs involved with recovering your identity and repairing your credit. Covered expenses include lost wages, phone bills, postage, notary costs and sometimes even attorney fees.
How Much Does Identity Theft Insurance Cost?
The cost will really depend on who you get the coverage from and what type of coverage your are purchasing. Some companies include it with your homeowner's policy while others offer it as a rider or a stand-alone policy.
Obviously identity theft insurance that's included with a homeowner's policy will be free and an add-on rider to an existing policy will cost less than a stand-alone policy. If you do purchase a stand alone identity theft insurance policy, plan on spending about $25 or $50 per year for each $20,000 of coverage. (Remember, this is a rough estimate.)
Where Do You Get Identity Theft Insurance?
Most insurance agencies now sell identity theft insurance. If you are interested in purchasing identity theft insurance, your first step should be to contact your insurance company and see what they offer and how much they charge.
Before you commit to anything, shop around. You can get identity theft insurance policies on the Web that will give you a good idea of whether or not your insurance company is offering competitive identity theft insurance premiums.
Finally, an alternative to identity theft insurance that we recommend is LifeLock, which is a proactive system to help you prevent identity theft, rather than a reactive system that can help you after the fact. You can find out more about LifeLock here.