A few generations ago one of society's biggest fears was "Big Brother." George Orwell's novel 1984 captured this sentiment well. However, society has evolved and the shift in fear has transferred from big brother to identity theft. The focus isn't so much on how society is monitored by the government, but what a few unscrupulous individuals can do if they get their hands on sensitive information such as someone's social security number or banking information.
Identity Theft Damage
Identity theft damage can range from being denied credit to paying higher auto insurance rates to being turned down for a job. One's credit standing is so intermingled in everyday life that a person can be financially and socially ruined just because they've become a victim of identity theft.
Recovering from identity theft isn't easy. First there's the financial loss, if the perpetrator was able to steal money before being discovered. There's also the time and effort it takes to correct the situation once the theft has occurred. Having identity theft insurance may not stop all forms of identity theft, it can, however, make the recovery process a little easier.
What does Identity Theft Insurance Cover?
- Reimbursement for money stolen
- Lost wages
- Recovery services
- Some identity theft polices, such as the one offered by Travelers, cover loan re-application fees and some attorney fees.
Identity Theft Ancillary Services
Signing up for identity theft protection services through some companies means the insured can take advantage of several monitoring services. Services such as fraud detection, database monitoring and credit card monitoring to name a few. These services help to prevent or minimize the loss if one should occur.
In addition to monitoring services, some identity theft protection services provide:
- Credit score monitoring
- Free annual credit reports
- Internet spy ware security
- Lost wallet protection
- Junk mail list removal services
Some victims of identity theft don't realize they have been victimized it until they are denied credit. If they were protected by a credit monitoring service, they might have realized the theft earlier and taken steps to mitigate the loss.
The Cost for Identity Theft Insurance
Identity theft insurance can cost as low as $49 per year to as much as $180 a year (payable in monthly installments). Generally, the higher the premium the more coverage is afforded. For example, Identity Guard, a service contract backed by AIG insurance company offers $1,000,000 in coverage for a premium of $179, while Travelers insurance company offers $10,000 in coverage for a premium of $49.
Where to Purchase Identity Theft Protection Plans
Keep in mind that not all contracts are insurance policies. Non insurance companies can offer identity theft protection contracts. The following organizations and insurance companies offer protection.
- LifeLock (identity theft protection service)
- Trusted ID (identity theft protection service)
- ID Watchdog (identity theft protection service)
- Identity Guard (identity theft protection service backed by AIG Insurance Company)
- Travelers (insurance company)
- Allstate Insurance (insurance company)
- Chartis Insurance (insurance company)
- Chubb Group (insurance company)
- Encompass Insurance (insurance company)
- Erie Insurance (insurance company)
- Liberty Mutual Insurance Co (insurance company)
- Nationwide (insurance company)
- State Farm (insurance company)
- West Bend Mutual (insurance company)
Is Identity Theft Insurance Absolutely Necessary?
In today's society where electronic banking and online purchases are increasing in frequency and volume, the chances of identity theft is on the rise. While it is not absolutely necessary to purchase insurance, is nice to have and relatively inexpensive to purchase.
Felicia A. Williams - Felicia A. Williams is a full time freelance writer with over 20 years of business writing experience.
