The risk of identity theft is skyrocketing in America today. People have increased their online presence and are using debit or credit cards more than ever. With each purchase or activity, they expose themselves to ruthless, invisible thieves. Identity theft insurance provides protection against financial repercussions.
Criminals enjoy the many perks of this lucrative career path. They easily obtain your personal information and will use it to commit crimes, open new accounts, divert your email, apply for loans, obtain credit cards, rent apartments, and the list goes on.
It’s hard to know how to protect yourself against the many potential threats. However, identity theft insurance can help. It is a simple, affordable safeguard against the costs associated with identity fraud.
What Is Identity Theft Insurance?
Insurance companies offer identity theft insurance to protect victims from financial costs incurred due to identity theft. It helps cover the costs resulting from fraudulent purchases on credit accounts or cards. You may add this insurance as a rider on a new homeowners policy, as an add-on to an existing policy, or as a stand-alone policy.
What Is Covered by Identity Theft Insurance?
Identity theft can cause you to incur financial loss, damage to your credit history, and may result in legal fees. Identity theft insurance will reimburse you for the costs associated with the recovery process.
Insurers differ in the coverages they provide, but in most cases, you will be covered for the following:
- Legal fees such as attorneys, court hearings, or civil judgments.
- Costs associated with placing fraud alerts on your credit reports.
- Notary fees and costs for copies of credit reports.
- Fees you pay to your bank or other lenders affected due to the fraud.
- Expenses for credit restoration specialists that help you with the recovery process.
- Lost wages and child care costs associated with identity theft issues.
Identity theft insurance does not cover stolen money or direct financial losses resulting from the identity theft. Typically, it reimburses you for the costs involved in the reporting and recovery process and tops out at around $10,000 to $15,000. In some cases, depending on the insurance provider, money stolen from your accounts may be reimbursed.
In addition to identity theft insurance, you are also protected by federal law. The Fair Credit Billing Act limits your direct financial loss from credit card fraud to $50.
Can You Detect Unauthorized Activity Right Away?
Identity theft often goes undetected by the individual until substantial losses have occurred. However, technology has come a long way in helping people detect unauthorized activity on their credit cards. Since 2016, about 21% of fraud victims detected the activity within one day, and 16% discovered the activity within one week. But, by then, a significant loss had already occurred.
In most identity fraud cases, victims discover the fraudulent activity in the following ways:
- 36% received a bill for things they didn’t buy.
- 41% detected bogus transactions on their account.
- 42% regularly checked their credit reports.
Many people opt to use a credit monitoring service that tracks and issues alerts immediately if suspicious transactions occur on their accounts.
Is Identity Theft Insurance Worth the Money?
Last year, more than 5.88 fraud reports were received by the U.S. Federal Trade Commission (FTC), a 19% increase from the previous year. According to the FTC, credit card-related fraud is the most common type of fraud today.
Take a look at these recent identity theft statistics to get a better idea of the many ways you can be scammed:
| Type of Fraud | Number of Complaints |
| Identity Theft | 1,434,695 |
| Imposter Scams | 995,789 |
| Phone Scams | 646,440 |
| Online Shopping Fraud | 410,399 |
| Credit Card Fraud | 389,845 |
| Other identity Theft | 377,203 |
| Email Scams | 264,069 |
| Social Media Scams | 159,458 |
| Bank Fraud | 124,497 |
Statistics provided by Experian.com
Although this is an incomplete list of the many ways you can be targeted for identity theft, it reveals a shocking trend you should be aware of.
According to the FTC, 5,001 identity theft complaints were reported in South Carolina alone last year. Aside from financial losses, many victims of identity theft have experienced emotional impacts such as anxiety, anger, resentment, a sense of violation, and suicidal thoughts. Identity theft insurance may help you avert some of these consequences.
Where Can I Get Identity Theft Insurance?
Identity theft insurance is available from most top insurance companies. To get the best coverage at an affordable rate, contact Sandifer Insurance Company in Cheraw, SC.
As a local, family-owned business located near historic Cheraw, SC, Sandifer Insurance has over 40 years of experience in helping customers get the right homeowners, life, auto, or farm insurance for their needs.
Identity theft is big business today, so it’s never too soon to take precautions against the ever-increasing threat posed by the perpetrators. Reach out to Sandifer Insurance today by phone, email, or online if you want the peace of mind that comes from knowing you are one step ahead of scheming identity thieves.
Sources:
- equifax.com/ – What is Identity Theft Insurance?
- ftc.gov/ – Fair Credit Billing Act
- experian.com – Identity Theft Is on the Rise, Both in Incidents and Losses
- nerdwallet.com/ – What is Identity Theft Insurance, and Is It Worth Buying?