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Understanding Identity Theft Insurance and How to Protect Yourself

Identity theft is a growing concern, with the Federal Trade Commission receiving 1.1 million consumer complaints about identity theft in 2022. According to Javelin Strategy & Research, an estimated 15.5 million U.S. adults were victims of identity fraud in the same year. While identity theft insurance can’t prevent identity theft, it can help you recover from it.

How Does Identity Theft Insurance Work?

Identity theft insurance assists in cleaning up the aftermath of identity theft. Coverage varies by insurer and state, but it may include:

• Reimbursement of legal fees: Covers fees for an attorney to defend you in a theft-related lawsuit.
• Reimbursement of lost wages: Compensates for wages lost due to time taken off work to resolve identity theft issues.
• Child care, spousal care, or elder care: Pays for care costs while you address your identity theft case.
• Monitoring of your identity and credit: Includes services to monitor your identity and credit for new accounts opened in your name.
• Notary fees: Covers the cost of notarizing theft-related documents.
• Certified mail: Pays for sending theft-related documents by certified mail.
• Phone bills: Covers phone calls related to your identity theft case.
• Assistance from a consumer fraud specialist: Provides expert guidance through the recovery process.

It’s important to note that identity theft insurance does not cover direct monetary losses from identity theft, such as fraudulent charges on a credit card.

How to Get Identity Theft Insurance

Identity theft insurance can be obtained from various sources, including property insurance companies, identity theft insurance providers, credit card companies, banks, and credit unions. Some insurers offer it as an add-on to homeowners, renters, or auto insurance policies, while others provide standalone policies. Additionally, some credit card issuers and banks offer identity theft insurance, either for free or for a fee. Companies that offer credit monitoring services, such as Experian, also provide identity theft insurance as part of their plans.

How to Protect Yourself From Identity Theft

To protect yourself from identity theft, consider the following steps:

• Never share personal information, such as your Social Security number or bank account numbers, especially online.
• Regularly review credit card and bank statements for suspicious transactions.
• Create strong passwords that are at least eight characters long and include a mix of letters, numbers, and symbols.
• Use a password manager to keep track of unique passwords for each online account.
• Regularly check your credit reports for unauthorized accounts.
• Be cautious of phishing attempts through emails or text messages.
• Install and update security software on your electronic devices.
• Shred documents containing personal or financial information.

The Bottom Line

Identity theft can be a costly and stressful experience. While identity theft insurance can’t prevent it, it can help you recover. For any mortgage-related needs, feel free to contact O1ne Mortgage at 213-732-3074. We’re here to assist you with confidence and expertise.

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