What Is Identity Theft Insurance And Do You Actually Need It

Over the years, the prospect of your identity being stolen can drive shivers down your spine. With the intro of identity theft insurance, there’s some bit of hope when you lose your documents. But what do you know about identity theft insurance?

Do you need to get it – how can it help you if your identity has been stolen? Those are some of the questions you need to ask yourself before getting identity theft insurance. To answer those questions, you need to read on below. 

You get to find out what identity theft insurance is and if you need to get it. 

What Identity Theft Insurance Is

You have health, home, and motor insurance; why not get an insurance policy for your identity. This is a policy that covers you for the expenses you incurred after your identity has been swapped. The policy covers costs in activities to restore your ID. 

The policy also covers the expenses incurred trying to repair your credit when the identity was stolen. When you take out this insurance policy, here’s what’s covered – it all depends on the policy through:

  • Long-distance phone calls
  • Lost wages
  • Copies of credit reports
  • Child care costs
  • Legal fees
  • Notary fees
  • Mailing documents
  • Credit monitoring services

It would help find the right insurance provider to get all the above services from your policy. Ideally, the insurance with the best services ensures you get your credit monitored in the period that you try to recover your identity. 

What you need to note, however, is that when you take out this cover, it doesn’t cover you for any losses that come from the theft. Only a few of the expenses from the time your identity was stolen will be covered. 

What to Keep In Mind before Applying

Before applying for identity theft insurance, there are a couple of things you need to look at. 

  • Compare the various products from the insurance companies offering the cover
  • Policy limits if there are any
  • Deductibles – are there any deductibles. 
  • If the policy covers legal fees – don’t leave it at that; you also need to determine what limit this applies. You also need to find out if the legal work needs prior approval by the insurer. 
  • Does the policy cover lost wages, and what triggers this cover? It would help if you also found out what limits apply for this coverage. 

How To Get Identity Theft Insurance

Now that you have covered all the bases, you need to find out how to get this insurance. For a start, what is ID theft – this happens when someone swaps your identity and uses it to commit fraud. It can also be used for various criminal activities. 

The process of regaining your identity can be tiresome and costly. That’s one of the significant reasons you need to take out identity theft insurance cover – it can help you with such expenses. 

Here are three options you can use to get identity theft insurance cover

  1. Add it to your homeowner’s insurance policy – it can also be added to your renters’ insurance
  2. Find out if it is included in your renters or homeowner insurance cover. 
  3. You can also buy it as a standalone policy

Regardless of the insurance cover reader, you are taking out, it costs at least $20 to $50 annually. This info is according to the Insurance Information Policy – this is an estimate. It would be best if you visited the insurer to get an exact figure. 

The homeowner or renters insurance is what is usually referred to as rider covers

When you have this insurance, the benefits can range from around $10,000 – $15000, depending on the cover. Those are the estimated figures according to the National Association of Insurance Commissioners. That amount may look huge until it’s time to recover your stolen identity. 

There are some cases where you can pay up to $30,000 for identity recovery. You will have to make up for the difference from your pocket—you then have some deductibles policies. 

When there are deductibles, it means you have to pay for the first up to $500 of the costs before insurance comes in. That’s not all you get when you take out this cover, as you have seen above.

The additional features you get are what insurance companies sell to you directly. 

Identity Theft Insurance

Do You Need Identity Theft Insurance?

The question you have been asking yourself all through the read is if you need identity theft insurance. You can answer this question in several ways as there’s no direct answer. 

First, the process of recovering your stolen or swapped identity can be expensive. If you don’t want to dig into your pockets for the recovery process, you are better off getting insurance. But you need to know what is covered in your policy in totality before you apply. 

It would be best to look at the policy that will reimburse you for the lost wages when you recover your identity. If you depend highly on your pay, you need to get identity theft insurance. It will ensure you get some bit of your income for the time off work. 

To answer the question – if you don’t want to spend money for your ID recovery process, you need to get insurance. You need to, however, be careful about how you expose your information. If you lose your ID, you need to report the matter to the authorities quickly. 

There isn’t much that the insurance cover can do regarding the expenses incurred due to the identity theft. But it would help if you looked at how much you will lose when you are in the process of recovering your ID. 

Identity insurance cover is for those who don’t want to spend or lose money during the recovery process of your stolen identity. This is what the cover is all about and what it entails, including some of the payouts. You also get to find out if you need the insurance or not. 

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