Identity Theft

Personal Identity Theft Insurance

Why Personal Identity Theft Insurance Isn’t Worth It

Personal identity theft has become a media favorite over the last several years. In fact, it has received perhaps more media attention than it deserves according to some experts. Personal identity theft has become so prevalent in the news and in the consumer mind that a new type of insurance has actually arisen from it. This type of insurance is known as personal identity theft insurance.

What Personal Identity Theft Insurance Covers

Personal identity theft insurance typically costs $25 to $50 per year and covers up to a total of $15,000 to $25,000 worth of expenses. It covers some lost wages that result from of time that must be taken off work to deal with fraud. Coverage for this benefit usually does not exceed $500 per week and is generally limited to four weeks of total coverage. Some attorney’s fees may be covered by this insurance.

Some personal identity theft insurance coverage may extend to notary and certified mailing costs for filling out and delivering fraud affidavits to the parties involved. Fees for reapplying for loans and credit cards that were turned down due to erroneous credit information are usually covered to a certain extent by this type of insurance. Long distance bills for calling banks and other merchants and law enforcement agents to discuss the fraud can also be covered.

While this may seem like a good deal for the price, consumers need to keep in mind a few things. First of all, identity theft is very unlikely. In fact the likelihood of being a victim of identity theft is just 0.35%. This makes identity theft a very unlikely occurrence.

Secondly, although the coverage from personal identity theft insurance may seem to be extensive, when broken down into its parts it is really not very beneficial. For example, although the lost wage coverage sounds good, it is only $500 per week (less than what many people would need to replace) and it does not take into account the fact that many people would not be able to take that much time off of their jobs.

Personal identity theft coverage does not actually fix your credit or criminal record, which is what auto or home owner’s insurance would do. Instead it only helps to pay for the expenses associated with fixing it yourself. Generally, these expenses do not warrant the cost to pay for this policy, as with most cases they do not exceed $1,000.