We hear a lot about identity theft, since it is a crime that seems to be one that can reach anyone, at any time. In order to help you feel a little more at ease, there are a number of products available that you can pay for in order to stay on top of your situation. Products like credit monitoring can provide peace of mind, even if they have flaws.
And, if you are worried about identity theft, there are also companies that offer insurance against the costs that you might end up with in terms of identity fraud. Before you pay for identity theft insurance, be aware of some of the realities that come with this type of insurance.
What Will a $1 Million Policy Get You?
One of the numbers that is often tossed out there is $1 million worth of coverage. The first thing you have to realize, though, is that this doesn’t necessarily mean that your identity theft coverage will kick in. Here are some of the the items to consider:
- Much of the time identity theft insurance only kicks in after other insurance pays out. So, you want to check your renters policy or your homeowners policy to see what items are covered as they relate to identity theft.
- Payouts for certain items might be limited. You might be covered for smaller items, such as the cost of getting a credit report. However, this is something that is often free if your identity has been compromised. Additionally, there might be a cap on what the insurance policy will pay in terms of lost wages.
- You might have hoops to jump through. In addition to limitations in what is covered, you might need to jump through hoops. For example, if you want compensation for lost wages, you might have to show that your lost wages are due entirely to your efforts to fix your credit.
- Attorney fees and court fees might not be covered up front. This is the one expense that you might really need help with. It relates to the fees you pay when someone uses your stolen identity to commit a crime. You will need to clear your name in a court of law. While identity theft insurance covers these costs in most cases, you will only receive the money at the end of the situation, meaning you will have to come up with money initially — even if you can’t afford it.
In the end, there are enough restrictions on identity theft insurance that it might not be worth it to pay the $15 to $20 a month for the insurance. If you are careful, identity theft insurance might be one of those policies that you don’t actually need. While paying attorney fees and court fees would be pretty difficult, chances are probably fairly slim that your stolen identity would be used to commit an actual crime — and that it wouldn’t be sorted out to some degree before things got too out of hand. Identity theft insurance might provide you with peace of mind, but, for the most part, you can probably handle most effects and costs yourself.