Caleb Markinson asked:




Identity theft insurance coverage is big business for companies looking to profit from consumer fears. Insurance coverage provides consumers with many different ways to pay for losses. Generally, all consumer identity theft coverage policies fall into one of two categories: prevention services and insurance coverage. The problem is best avoided but since no one is one hundred percent invulnerable to identity fraud, insurance provides a nice soft place to land if you do fall victim.

Prevention Services

Credit monitoring, fraud alerts, and consumer counseling are all prevention services that provided when seeking coverage. Most lenders, all three credit reporting bureaus, and many independent companies offer some form of prevention services, but they usually provide this service for a fee. Occasionally, a lender will provide credit monitoring for free as a bonus for using their financial institution.

Typically, prevention services work about the same manner no matter the company. The service allows the company to track inquires and accounts on your credit report and notifies you immediately if something suspicious shows up on your record. Often, if identity theft does occur, the companies that offer insurance coverage will also offer assistance in the form of advice or resources. The fees for these services are customarily charged on a monthly basis and range from less than $10 to around $40 a month.

Insurance Coverage

Insurance companies wasted no time in jumping on the bandwagon by devising policies to provide coverage to identity theft victims. Some policies providing stand-alone coverage for people who don’t own homes or don’t want to include the protection with their homeowner’s policy while other policies roll the client’s homeowner policy and identity theft insurance into one. The important thing to know if you are a consumer interested in coverage is whether or not you already are covered. Read your homeowner’s insurance policy to make sure that identity theft is not already covered before purchasing additional insurance that you don’t need.

If you find that you are in need of insurance, you can rest easy knowing that premiums for coverage are very inexpensive, only about $25 to $50 a year for coverage of about $15,000 or $20,000. The policy will cover any out-of-pocket costs associated with identity theft above the deductible value.

Keep in mind that although the average victim only pays about $500 in fees and lost wages, this figure can sometimes be much larger in special circumstances. Consider your needs carefully and talk over the extent of coverage you should invest in with your insurance agent.

Ben

John Rasor asked:


wants to be the target of identity theft, and yet, despite consumer awareness and prevention practices, in 2008 ten million people were victimized. It seems like everyone should be overjoyed at programs to curb this threat from the creditor’s side.

Not so. Some organizations, such as the American Medical Association, feel that their members should be exempt from developing and implementing written identity theft prevention and detection measures.

Resistance from the AMA has been so strong that the deadline for putting the Red Flag Rules into practice has been delayed 3 times since it’s inception in November 2007. The new deadline is November 2009.

Banks and other credit issuing entities also object to monitoring the 26 red flags designed to prevent anyone from using another person’s identity – for gaining credit, for getting a job, for renting an apartment, or for obtaining medical care under another’s insurance policy.

Why? They feel that the new rules are “excessive and overly burdensome.” Huge banks will probably have no trouble with compliance, but smaller organizations without a large staff may have to hire 3rd party companies to carry out this function. Either way, implementing the Red Flag rules will cut into profits.

One objection from the AMA is that physicians should not be classified as “creditors,” even though they grant credit when they accept payments for care, or when they wait for payment until an insurance company responds to billings.

Lawmakers are not heeding this argument, because they are particularly concerned with “medical identity theft.” Not only can thieves obtain medical care using someone else’s insurance, the resultant medical records could be medically dangerous to the person whose identity was stolen.

Coming into compliance will definitely prevent “instant credit,” because checking some of the 26 Red Flags will require a little research. First, it will be necessary to obtain and actually read a credit report. The first red flag will be the inability to obtain that report due to a credit freeze. Next would be a fraud alert placed on the report.

From there, credit issuers will need to examine the report for inconsistencies when compared to the application for credit. Some, such as checking the borrowers social security number against his date of birth, will require further effort.

To read the entire list of 26 Red Flag Triggers, visit Bankrate.com http://www.bankrate.com/brm/news/Financial_Literacy/identity_theft/red_flags_a1.asp?caret=92g

Meanwhile, since the rules are not yet in effect, check your own credit report today… You could be a victim and not even know it.

Lillie