Is Identity Theft Insurance Worth The Premium Cost?
While the media highlights several cases of identity theft, the odds of a person being a victim are less than being audited by the Internal Revenue Service. Cleaning up your credit report following a theft incident will usually cost less than the cost of an audit and associated charges. Identity theft insurance is one of the fastest growing policies in the business today, and when doing the math, some wonder if the low cost of identity theft insurance policies is worth the annual premiums.
Typically, in cases of identity theft banks, stockbrokers and credit card companies usually cover any charges made in the names of identity theft victims so the losses incurred financially are usually low. The cost comes in the time it takes to contact and correspond with agencies that must be notified in the even of identity theft. Insurance promises to pay for some of the related charges, but the personal aggravation and worry is not calculated into a loss.
It has been estimated that the average victim will take about three weeks cleaning up their credit and about $1,000 to clear their name from banks and other creditors. Some Identity theft insurance policies will pay for lost time from work spent working on clearing the credit file and pay some of the incidental charges such as postage, certified mail and copying documents or the cost of obtaining duplicate copies. Many policies will reimburse lost wages up to $250 a day, but until the problem is cleared up, there will be no payments.
Credit Reports Remain In Shambles
Sellers of Identity theft insurance also promise to pay to help clear judgments issued or criminal records created by someone using another’s identity, but according to reports only about 15 percent of identity theft victims incur this type of cast, which can range from five to $15,000. Considering the odds of being a victim of identity theft is less than one-half of one percent, the cost of the protection could outweigh the benefits.
People who like having that extra layer of protection and choose to pay for Identity theft insurance should understand that it does not cover the anxiety or stress involved in getting your finances back in order. Nor does it automatically take all the negative comments off of the credit reports. Those will have to be done by the victim and will be added to the stress of realizing that someone is claiming to be someone they are not.
