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