Identity Theft Insurance aim to
provide victims with reimbursement for all expenses they encounter as they
restore their identities and clean up their credit reports. The financial cost
of identity theft to anyone is undeniably high that an average individual would
have to keep a frugal life for quite a number of years in order to pay-up
everything that's erroneously done by someone else. The insurance policy will cover
all expenses while the victim restores his or her identity such as credit
report copies, phone bills, lost wages, notary and mailing costs, and
attorney's fees. On the average, identity theft insurance costs a maximum of
$200 annually with around $20,000 coverage. This is usually sold as an add-on
to homeowner's insurance but can also be bought separately.
In a macro view, identity theft
insurance gives anyone the peace of mind knowing someone will cover any
possible financial damage the crime can cause.
Now let's review the coverage details
and see how it impacts a real victim's journey to regaining his identity.
An individual is not held responsible
for debts caused during identity theft situations, however, he or she should be
responsible for cleaning the damage to his or her name and credit standing. The
individual should be the one responsible for monitoring his or her credit
reports, bank accounts and statements. The individual, more often than not,
would have to be off from work to process his or her documents. While the
policy can reimburse maximum of $2000 due to lost wages for the days he or she
fails to report for work, consider the fact that restoring someone's identity
takes up time - a lot of it. Two thousand dollars could be equivalent to an
average individual's 60-day salary, a time range that may not be equivalent to
the time that will be spent for the entire restoration process.
It is also important to note that
identity fraud insurance only covers theft via credit fraud. If the thief committed
common law violations, driving offense for example, the insurance policy does
not apply. If a home insurance pays for the repair of one's home, id theft
insurance will not pay for the repair of one's credit record or clear one's
criminal report. The individual would have to do these on his or her own.
It's very helpful that the policy can
cover cost for certification of documents, notary, and phone calls. Insurance
also offers big reimbursement for attorney's fees. However, while lawyers will
be of very good help, an ordinary identity theft case doesn't really need
lawyer's full services other than notarization of documents.
Therefore, the coverage policy may not
be at all useful for average identity theft victim. Certainly nobody would wish
to be involved with extreme cases just to use up the $15000 allotment for legal
fees.
Prevention is still the best step to
take in fighting identity theft, but if you would want that peace of mind,
identity theft insurance may be a good decision. Just ensure that you know the
very details of your policy.
