Identity Theft Insurance: What It Is And What It Covers

Do you ever feel like someone is trying to impersonate you? If you do, then you need to purchase identity theft insurance.

Identity Theft Insurance: What It Is And What It Covers

Once you start noticing that someone is trying to steal your personal information, don’t just do nothing. Instead, purchase identity theft insurance to restore your identity. There is no other reason someone wants to steal your identity except for financial gain.

There are a lot of insurance companies that offer identity fraud insurance. It is often an extra-added service for renters, homeowners, and other policyholders.

Anyone can be a victim of identity theft, and trust me, the consequences are grave. Most people lose a lot of money, and others just spend all their time reversing the damage. Whatever the case may be, it is expedient to purchase identity fraud insurance.

What most people do not know is that identity theft insurance protects against identity theft. It prevents stolen identities and resolves identity theft losses. If you purchase family plan identity theft insurance, not only will your identity be protected but that of your household as well.

What is Identity Theft Insurance?

Identity theft insurance, also known as identity fraud insurance or identity protection insurance, is an insurance coverage that helps individuals recover financial losses and restore their credit in the event of identity theft or fraud. It covers some of the costs related to identity theft. It can be expensive to restore your identity once it is stolen.

But if you have identity fraud insurance, it will be less expensive for you because it will cover the cost. Note that it does not stop identity theft from happening. It only covers the financial loss incurred when your identity is stolen.

How Does Identity Fraud Insurance Work?

Just the way your home or car insurance works—that is how identity theft insurance works. It covers all the expenses used to retrieve your identity. However, you can purchase this insurance policy from any insurance provider. You can purchase it as a standalone policy or as an add-on to an existing policy.

How Much Does Identity Theft Insurance Cost?

The cost of identity theft Insurance varies among identity theft insurance providers. Also, the cost depends on a few factors, like how comprehensive the coverage is and where you live.

Identity protection insurance can actually be added to an existing insurance policy, or you can purchase it as a standalone policy. Whichever way you want it, just make sure you are purchasing identity fraud insurance.

Do I Need Identity Fraud Insurance?

Of course, you need identity fraud insurance. You might not need it now, but someday you will. Identity theft is on the rise. So, to be on the safe side, you should consider it if it is at a good price.

What Does Identity Theft Insurance Cover?

If you are purchasing this insurance policy, you need to know the coverage you are getting. But know that it covers some of the expenses incurred in trying to restore your identity. Here are the lists of coverage offered when you purchase this insurance policy.

  • Postage costs
  • Long-distance phone bills
  • New document costs
  • Credit agency fees
  • Child care costs
  • Specialist fees
  • Bank fees
  • Lost wages
  • Legal fees
  • Notary fees
  • Money stolen

It covers other financial fees, like loan reapplication fees, in a situation where you are denied credit due to fraud or identity theft. Note: Identity theft insurance does not cover all direct financial losses as a result of identity theft. But it will pay back some of the expenses incurred after the theft.

What Does Identity Fraud Insurance Not Cover?

There are a few things identity protection insurance does not cover, and they are listed below.

  • It does not cover stolen money.
  • Direct financial losses from fraudulent purchases.
  • Unauthorized use of credit accounts

These are the things not covered by your identity protection insurance policy. It only reimburses you for the cost of the recovery process.

How Do I Check for Identity Theft?

There are ways to check for identity theft. But you cannot rule out the possibility of being a victim. However, you can take action to spot potential theft.

  • First, you have to monitor your credit score.
  • Keep an eye on your credit reports.
  • Look at your bills.
  • Read your email.

Another way you can check for identity theft is when your tax return is denied as a duplicate, when you are denied credit despite having an excellent credit rating, or when you don’t receive important mail.

FAQs

How Does Identity Theft Happen?

Nobody can really explain how it happens, but you can only see the signs. But it happens when an unknown person is in possession of your personal information, like your full name, address, driver’s license number, social security number, credit card details, and date of birth.

Who Needs Identity Protection Insurance?

Everyone needs to purchase identity protection insurance. Some people are more prone to fraud than others. This is because people always have access to their personal information.

Is Identity Theft Insurance Worth It?

Yes, it is worth it. People who do not monitor their credit reports and financial accounts regularly will benefit more from this insurance. Aside from that, it will protect them from identity thieves.

Where Do I Buy Identity Protection Insurance?

Identity theft insurance can be purchased from any insurance company. It can be purchased as a standalone policy or as an add-on to an existing policy.

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