Identity Theft Insurance: Do You Need One?

The number of people falling victim to the identity theft is growing; when thousands of such complains are getting accumulated in the law enforcement department, thousands others are remaining unuttered. In most cases, the damages are done even before the victim realizes it. Once the crook is in possession of your personal information they can commit crimes on your name, can open new bank accounts, apply for new credit cards and can even cheat you for the insurance benefits as well.

As some may label it as the fastest growing form of white-collar crime the actual figure of identity theft victims is not known. The nature of the crime can range from fraudulent use of the credit cards to impersonation. In such cases, the identity theft insurance can ensure your peace of mind and people often don’t mind paying some extra money for protecting themselves form ‘falling a prey’ to it. One can now-a-days purchase the identity theft insurance as a stand-alone plan or can add it as a rider to their homeowners policy as well. But before buying the policy you may wish to know what the insurer actually covers under the identity theft plan.

The coverage offered by the policy:

People often feel that they are actually covered for the entire monetary loss that they have suffered in the scam. But unlikely, the identity theft policy only covers the expenses that the victim incurs during the restoration process of the damages. However, the benefits can vary form policy to policy but you may receive coverages for the following:

•expenses of making phone calls
•mailing expenses (you may require to mail your documents to the authorities in order to repair the damages done to your credit report and other)
•the legal expenses

Hence, if you are planning to buy one, you should ask the agent to explain the coverages offered by the policy. Another factor that you need to look for is the amount of deductible applicable to the plan. Higher the value of the deductible, lower will be your premium, but you may find it unworthy to turn the claim to the insurance company after paying the deductibles yourself.

Protect yourself form the identity-thieves

However, as prevention always scores above the cure, you can actually stay out of trouble by practicing the simple steps mentioned below,

Guard your personal information: never disclose your personal information like-credit card number, bank account details, social security number and so forth to any entity not known to you. Always ask them to identify themselves before handing over any information to them.

Maintain a call log: you can maintain a call log containing the names and the numbers of the persons who have requested you for the information.

Don’t get lured by the promotional offers: this is a very easy way to fall prey to the fraudsters. Never respond to such mails or phone calls. Phishing is another way to acquire information. Therefore, be careful in responding to e-mails requiring you to reveal your personal information.

Ask for the free credit report at intervals: as you may know it already that you can receive a free copy of your credit report form the credit bureaus once in a year, scan through it for the spurious transactions.

Check your monthly credit card and bank statements: this is another way to track the transactions and dealings that you haven’t made. The insurance can buy you the peace of mind but it can’t protect you form becoming a victim of identity theft. Stay aware in order to stay safe.