Americans are far more likely to have their identity stolen than their wallet or purse. In 2015, there were 327,374 robberies in the United States compared to 13.1 million people affected by identity theft. As cyber crime increases, so do protective measures including identity theft insurance.
Identity theft insurance is an add-on feature to homeowners and renters policies, usually costing about $25-50 a year while providing protection of $10,000 and up. However, there is a lot of confusion about what this insurance feature actually covers. “Identity theft insurance” is a bit of a misnomer. The service doesn’t replenish monies lost as a result of an identity theft. A bank or credit card company will do that as part of their zero-liability policy. So why have identity theft insurance at all?
Identity theft policies cover the costs involved in recovering your identity--lost wages and legal bills for example. The policy may assist with the recovery of identity documents, a time consuming endeavor. Most cyber attackers are interested in money, not identity. Eighty percent of identity thefts involve credit cards. Resolution in this case is a simple phone call to a bank. It becomes complicated when social security cards, birth certificates and driver’s licenses are breached. In that case, if you would want one individual to do all the work to recover your identity documents, identity theft insurance is a good choice.