The Insurance for Identity Theft, is it Real?
You may think that just like any other insurance cover, the insurance for identity theft is offered to protect you from the possible damage. But you should not sign up for such policy blindly just to get peace of mind. Remember, these policies are offered by financial companies which failed to protect your identity in the first place!
Another important thing about this insurance is - it does not cover you from the loss of money from your bank account and you to identity theft. It also does not cover any loss on fraudulent use of your credit card by the identity thieves.
Some companies offer a compensation for loss in the wages up to $2,500. Most of the companies offer money towards legal fees. In most of the cases of identity theft, no legal fees are involved as there is no purpose of taking legal action against anyone! Identity thieves do not have any face. Most of them are at large. If someone is caught sometimes, the action is taken by the Federal and state agencies, you need not do anything.
There is one more fine print in the offers for insurance. If your identity is stolen by someone who is your family member, there insurance cover is no more available. In that case the insurance becomes void.
Some credit monitoring companies make offers policies offering cover for millions of dollars. However you should read such offers very carefully. Most of them are deceptive because they will offer coverage only if an identity is stolen due to their failure of protecting your identity! So don't be under the assumption that once you take such a cover you will be able to get millions of dollars in case your identity is stolen. And in spite of their cover, you will be required to deal with your bank and your credit card company for sorting out the mess.
So identity theft insurance is not something where you should put in your money. Even though the premiums look very small, there is no practical use of such cover. Instead, if you apply your own strategies and keep a regular watch on your credit report as well as bank statements, which will help you anytime.
Published by Chintamani Abhyankar
I specialize in taxation, personal finance and identity theft issues. My tax strategies for small business owners have resulted in saving thousands of dollars to my clients. Beginning my career as a chart... View profile
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