Identity Theft

 

Identity Theft Insurance


What is identity theft insurance?

Identity theft insurance is coverage to compensate you for lost wages (time spent off work to straighten out identity theft issues) and costs incurred in fixing your credit record: mailing, phone calls, attorney fees. Before purchasing it, though, consider this:

  • The majority of identity theft victims don’t lose more than $500.
  • Very few victims of identity theft must use attorneys.
  • Clearing up identity theft may take some time away from your job, but the main costs relate to postage for certified mail and long-distance phone charges.
  • Most protection schemes don’t offer much more than a few thousand dollars in lost wages.

The most important fact, however, is that most identity theft involves stolen credit cards. And on credit cards, only in rare cases are you actually liable for paying the impostor’s debts. In fact, federal law makes you liable for only $50 in fraudulent charges, and the major credit card companies waive even that.

Identity Theft Insurance: To Buy or Not to Buy

Clearly, you need to consider your specific situation. If you are thinking about buying identity theft insurance because you worry about a theft running up bills on your credit card, you may want to reconsider. If, however, you tend to lose your wallet, and it contains a lot of personal information, identity theft insurance may be worth you while. For more information, visit the consumer.gov website and search for identity theft insurance.

On the next page, we summarize much of what was covered in the guide with an identity theft checklist.

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