Identity theft insurance offers individuals a chance to lower their expenses if their identity is stolen. It will cover some of the expenses the individual incurs from having accounts frozen and assembling proof that it is in fact a case of identity theft. Some credit card companies will offer identity theft insurance for free for a promotional period, and others will even give it to card holders for free indefinitely.
What Identity Theft Insurance Covers
Identity theft insurance will not cover the money you lose as a victim of identity theft. That is up to the companies with which you have a financial accounts. The insurance will cover the costs you pay for making phone calls, copying documents, mailing documents, and potentially, some legal bills when you are dealing with issues arising from the theft of your identity and your accounts.
Deductibles
When determining the type of identity theft insurance you want to purchase, it is important to find out what the deductible is. This is the amount that you must pay out of your pocket before the insurance will begin covering your expenses. The average is between 100 and 150 dollars, with the average loss for an individual that has his identity stolen being less than $1,500, according to the Federal Trade Commission.
You Might Already Have Identity Theft Insurance For Free
Before you purchase identity theft insurance, you should check with your financial account providers to find out if they offer free identity theft insurance on your accounts. One company that offers this is American Express. If the financial company offers it, find out if it is for just your account with their company or if the identity theft insurance provided by that company covers all your accounts.
Cost
If you are going to pay for identity theft insurance, it will cost between $50 and $100 a year on average. You can purchase identity theft insurance from a credit card company or from an independent company such as PrivacyGuard and Cendant.
Disadvantages
Due to the security checks involved with a credit account that has identity theft insurance protection, you can not have credit offered instantly. It can still be done the same day for items such as automobile financing, but you will not be able to apply for a credit card online and be able to use the credit card number that day.
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