What are the Benefits of Identity Theft Insurance?
Why should I get identity theft insurance?
While others say that a subscription to credit monitoring is way better than having identity theft insurance, they obviously haven’t looked at the perks and the importance of identity theft insurance. Credit monitoring should be taken for its literal meaning. The word really stands for what it does. But after finding out that your identity has been stolen, you are primarily liable for clearing up the charges on your credit card. Yes, of course, your name can be cleared, but just think about the tedious and costly process of getting a lawyer for advice for your defense and also the hassle of proving your innocence on top of being liable for the charges appearing on your credit card statement.
Credit monitoring advocates say that identity theft insurance will not help you clean up your criminal records when you incur a problem or improve your credit standing, but credit monitoring does not do those things for you either. Credit monitoring only allows you to see the reports of what is happening to your credit. It only serves as an alert for your protection. Don’t get it wrong, of course, credit monitoring is highly recommended, but identity theft insurance can help you fix your problems with regards to charges you incur after you find out that you have been id theft victimized. Some offer prepaid attorney’s fees, phone charges for phone calls you made in the process, the money stolen from you, wages lost up to a certain amount and duration, the cost of notarizing documents, costs of certified mail among others.
For instance, even if there is a guaranteed $50 dollar cap per card on fraudulent charges on your credit card, what will you do with bill statements amounting to more than $20,000? Clearing up this problem can take some time and with bills like that your credit would likely take an immediate hit because of the credit utilization rate. Remember fraudulent or not the bills are still in your name in the meantime and until it is settled, will remain as such. This is where the importance of identity theft insurance is realized. Identity theft insurance does not give you a false sense of security. When you become a victim, the agency where you acquired your identity theft insurance becomes primarily liable to reimburse you for the amount of money you would have to spend, depending on the amount covered by your policy.
Consumers who may say, anyway, there is very little chance of having my identity stolen, and I always keep watch of where I keep my credit cards.
Many reports say that the chance of having your identity stolen is very low. Think again identity theft is on the rise claiming 12.6 Million victims in 2012. Identity thieves and hackers are always thinking up ways of trying to steal information. You never know what kind of plans these guys are thinking up. Moreover, any sort of negligence on your part gives them a chance to take away your identity. For example, your mail is always susceptible for pilferage, your credit card’s photo can be taken (including the back which contains your security code), or there can be a key logger installed in the computer you are using. A key logger records anything you type on your keyboard. Hence, any personal information regarding your identity, including your usernames and passwords for online banking access can be vulnerable.
Sadly, family members or housemates are potential identity thieves because they are near you and your personal belongings. It is at this instance that peace of mind can be bought. Make sure to shop around and read the details so you know what you are getting. For comparison purposes you can check out the policies at Equifax, Experian and TransUnion. In addition, even if they say that the chances of having your identity stolen are low, so are the chances of your house getting burned down. As mentioned before, nobody can tell the future. Good credit can save you literally thousands of dollars, and identity theft could rob you of those savings from good credit because of having your credit record devastated. Having mentioned that, we can safely say that the need for a fire insurance policy is as important as getting identity theft insurance.
Joy Mali is an active blogger who is fond of sharing interesting finance related articles to encourage people to manage and protect their finances.
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