Identity Theft Insurance

Identity Theft is an additional coverage which may be included with your Home Owner’s Insurance policy.

Identity theft occurs when someone assumes another person’s identity, usually in order to falsely represent that person in accessing accounts, acquiring credit and other benefits in that person’s name.  It is a form of fraud.  The victim, or the person whose identity has been assumed by the thief, may suffer financial loss and personal credit damage.  The victim may also be facing legal issues and costs to prove that an identity theft has occurred and that any credit created or purchases were made by someone else under false pretences.  ID theft insurance is the fastest growing insurance product on today’s market.

The term “identity theft,” which was coined in 1964, is actually an inaccurate placement of title, because technically it is impossible to steal an identity.  It is more appropriate to say that a person has been impersonated, and thusly the terms identity fraud or identity cloning may be more applicable.  Yet the accepted term is identity theft, and is now publicly commonplace.

How Identity Theft Happens:

Some circumstances with ID theft involve an individual whose driver’s license, social security number, or other personal data has been discovered by another and used to establish credit, access that person’s existing money accounts, or use that person’s existing charge accounts.  Other circumstances may involve the breach of large databases that contain the private information of any number of individuals, perhaps thousands or even millions of people.  Although the odds of either of these or other methods of discovery allowing someone to steal your identity are fairly low, the ramifications can be extensive.  Often the culprit conducting the fraudulent actions is discovered and the actions are brought to a halt.  However, a lot of damage may have been done that goes beyond the initial accounting.

The discovery of identity theft often reveals a fairly low amount of actual loss, the average of which is about $1,000 dollars.  But inclusive of the basic monetary issues, additional costs begin to add up.  If credit was established in your name and payments are overdue, this reflects negatively on your credit.  Preventing more charges from accruing is just the starting point of recovery.  If your credit is damaged you can prove that ID theft has occurred and that the charges were not valid.  However, getting the credit bureaus to remove the damage to your credit information and score may take a lot of time, and could be frustrating.

Identity Theft Insurance Benefits:

It is estimated that fixing extensive damage from ID theft may take as much as a month of full time work, and full recovery could take years.  The problem could be cause for time off of work, long distance telephone charges, faxing documents, notary costs, and sometimes attorney fees, while communicating with merchants, financial institutions, and law enforcement agencies.  Many of the charges and costs will be covered by identity theft insurance.

Identity theft insurance cannot protect you from the initial impact of ID theft, but it can assist you onto the road to recovery.  It can be low cost, and either be an add-on to an existing policy such as homeowner’s insurance, or a stand alone policy.  Let Chad Olson of SoCal Platinum Insurance explain the benefits and find the right coverage for your needs.