Identity Theft Insurance

Identity Theft Insurance typically protects the policy holder from losses due to attorney's fees, telephone calls, lost wages (up to a certain amount), and the cost of denied credit.  It does not cover your financial losses due to the actual fraud itself; however, credit card holders are only responsible for $50 of fraudulent charges.  Certain insurance companies include identity theft protection in their homeowners insurance policies. Other carriers market coverage as an endorsement to homeowners or renters insurance policies or sell that protection as a stand-alone policy. Some credit card companies offer insurance to their premium customers.  Theft insurance is sometimes included for free when you subscribe to a credit monitoring service. 

Do You Really Need Identity Theft Insurance?

According to the Identity Theft Resource Center, the average identity theft victim spends $808 on out-of-pocket expenses.  Purchasing a low deductible identity theft insurance policy would probably pay for itself in the long run.  All policies do not offer the same benefits.  If you're interested, then I would suggest consulting with your homeowner's insurance agent before you go looking to purchase a stand-alone policy.

Bear in mind that having identity theft insurance coverage does not mean that you no longer need to review your credit report on a regular basis. 

Find out more about recent Identity Theft Alerts.