Posted: Sunday, December 30, 2007 12:00 am
Identity theft continues to be a hot topic as 2008 rolls in. And judging by the calls received by the Better Business Bureau serving northern Colorado and east-central Wyoming, many consumers wonder if they should buy insurance to protect themselves.
Identity theft insurance provides reimbursement for the cost of restoring your identity and repairing credit reports. This includes phone bills, lost wages for time taken from work to deal with the fraud, notary expenses, loan reapplication fees, certified mailing costs and sometimes attorney fees, with the prior consent of the insurer.
Some insurance companies include identity theft insurance as part of homeowner's insurance. Others sell it as either a stand-alone policy or as an endorsement or rider to a homeowner's or renter's insurance policy. According to the Insurance Information Institute, these policies cost, on average, between $25 and $50 for $15,000 to $25,000 worth of coverage.
Purchasing such insurance is a personal decision. Remember, however, that victims are usually not liable for fraudulent charges incurred because of identity thieves. It is out-of-pocket losses that should be considered. The 2005 Identity Fraud Survey Report released by Javelin Strategy & Research and the Better Business Bureau found that while the median value of identity fraud crimes is $750, most identity fraud victims incurred no out-of-pocket costs. The average victim spent 28 hours trying to "restore" his or her credit record.
If you decide to purchase ID theft insurance, the Better Business Bureau suggests:
- Check first with your insurance agent or insurance company to find out if identity theft insurance is offered. Ask what they recommend for your situation.
- Be cautious before investing money in a new product offered by an unknown company. Make sure you deal with a reputable organization. Contact the Better Business Bureau for a reliability report or visit www.bbb.org.
- Ask about the deductible; coverage limits (some policies place a dollar limit on retaining legal assistance or on the amount of lost wages that will be covered), and any restrictions on how money for expenses is to be spent.
For additional tips and information on dealing with identity theft, visit bbb.org or call 800-564-0371.