Why You Shouldn’t Bother With Personal Identity Theft Insurance
July 24, 2009 by Guest Author
Filed under Credit Score
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 Does It Cover?
The insurance itself generally costs about $25 to $50 per year and covers from $15,000 to $25,000 of costs including lost wages from time to taken off from your job to deal with the fraud problem. Coverage for job loss is usually capped at $500 per week for a maximum of four weeks. This insurance may also cover some legal fees.
Some insurance may also cover special mailing charges to mail fraud affidavits to the correct people. Fees for credit cards and loans that were applied for and rejected due to false information are at least partially covered.
Long distance bills for calling banks and other merchants and law enforcement agents to discuss the fraud can also be covered.
This may seem like a good deal for the money but keep in mind a few things. Identity theft is very unlikely. The chances of being victimized are only about 0.35%. Chances are it will never happen to you.
The coverage may seem adequate but when actually broken down, parts of it aren’t very useful. For example, the lost wage item sounds good but at $500 a week, it’s not enough to cover what many people would be making. As well it doesn’t consider that many people are unable to take time off from work.
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.
