Identity Fraud Insurance - What it Covers, what it doesn’t | Get Financial Freedom Tips | Transform Your Financial Future


Saturday, February 25, 2012

Identity Fraud Insurance - What it Covers, what it doesn’t

Identity theft and identity fraud crimes are becoming increasingly common. And to the misfortune of the person whose identity was stolen, reclaiming an identity is often an arduous, and expensive, undertaking. Recently many homeowners insurance companies have begun offering identity theft insurance as an add-on to a standard homeowners insurance policy. Learn what’s covered and what’s not covered so you know if identity theft coverage is right for you.

Identity Fraud Insurance
Did you Know? According to a 2010 report on identity fraud conducted by Javelin Strategy and Research, 11.1 million adults were the victims of identity theft in 2009- that’s 4.8% of the U.S. Population. The total fraud costs were around $54 million.

Identity theft insurance covers the expenses that a person normally incurs when trying to reclaim their identity. It does not, however, cover the funds lost when for example someone opens a credit card in your name and charges items against your credit. The coverage provided instead covers the expenses that you will incur after your identity is stolen which include attorney’s fees, medical and federal ID reissuance, lost wages, court costs, etc.

Since these costs alone can add up to tens of thousands of dollars many insurance agents recommend that you purchase insurance specially designed to protect you against these costs. Identity fraud insurance is sometimes included in a premium-package homeowners insurance policy or can be added on to many standard homeowners insurance policies for a reasonable annual fee. Most policies cover you for up to $25,000-$50,000worth of costs incurred to reclaim your identity and cost between $25 and $45/year. Typically an identity fraud insurance package would not have a deductible.

Identity Fraud Insurance
Also, many insurance carriers provide consultation services for customers who experience identity theft. They can speak with an identity fraud specialist who can help them reclaim their identity faster and with fewer hold-ups along the way.

When considering whether or not to purchase identity fraud insurance coverage, be sure to ask your agent the following questions so that you are properly informed about your policy:

• What specific costs does the policy cover?

• How much is the annual premium?

• What are the limits of the various coverage components?

• Is there a deductible?

• Does this policy include credit resolution support?

Here are a few tips for preventing your identity fraud :

1- If you use your credit card for making purchases online, make sure the website you are using is a secure site by looking for security logos and licenses from companies such as Verisign and McAfee.

2- Avoid entering your social security number online unless it is necessary.

3- Shred any documents that contain personal information especially social security numbers and account 
numbers before throwing them in the trash.

4- Monitor your credit report frequently so that you can quickly find any mistakes or fraud. Most experts recommend checking your credit report every 3-4 months. If you spot a mistake on your credit report or an account that you never opened file a dispute with the credit bureau immediately.

If you suspect that your identity has been stolen, file a police report right away. If you have insurance fraud coverage, contact your insurance agent immediately to find out what your next steps should be.

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