What Is Identity Theft Insurance? And How To Claim It?

Identity theft is a serious crime that affects a large number of the world’s population. From unauthorized credit and debit card transactions to account takeovers, anyone can be affected by identity theft.

According to a report by GIACT, almost half of the US consumers, constituting 47%, suffered identity theft, with 37% of them encountering fraudulent applications, while another third encountered account takeovers. The report showed about a 42% increase in identity-related cases in 2020, which makes it all reasonable to have some protection against these activities.

In this article, we will have a look at how you can deal with identity theft with the help of insurance and how you can claim it.

What Is Identity Theft?

Identity theft is a crime in which someone else uses your personal and financial data to pretend to be you. One good example is the Bari Nessel case, a woman who stole information about employees. In particular, Linda Foley came to realize later on that she had accrued a lot of credit debt and had trouble applying for a loan because Ms. Bari had maxed out her card by using her social security number.

Another case is False Dimitri 1, who claimed Tsarevich Dimity’s identity and eventually became the Tsar of Russia from 1605 to 1606.

The ramifications of identity theft today are much worse than they were a decade ago. With countless people having details of your full credentials and websites always requesting you to log in to your details, it has become easy to experience identity theft.

Types Of Identity Theft

Victims of identity theft do not usually know about their condition. It is not until you start getting calls from the bank requesting you to pay your loan, or you go to withdraw some cash, only to find you have no money left.

These are just a few cases. Identity theft is an expansive crime that affects adults and children. The various types of identity theft include:

1) Financial identity theft- someone uses your identity to obtain credit, services, goods, or benefits

2) Social security identity theft– someone steals your social security number and uses it to apply for loans and credit cards. 

3) Medical identity theft– someone uses your identity to get free medical care meant for you.

4) Synthetic identity theft– someone uses your stolen identity and combines it with some fake information to create a new identity for themselves.

5) Child identity theft– here, someone uses a child’s identity to obtain loans, avoid arrest or even obtain residence and find employment.

6) Tax identity theft-when someone uses your name and social security number to file for bogus tax returns and collect a refund 

7) Criminal identity theft– criminal pose as someone else to avoid summons, arrest, or convictions.

What Is Identity Theft Insurance?

The rampant increase in identity theft prompts individuals to look for fallback plans in case they ever find themselves in huge debts they knew nothing of. That is when you start looking for identity theft insurance.

So, what is identity theft insurance, and what does it cover? Better yet, how do you claim your identity theft insurance?

Identity Theft Insurance

Identity theft insurance is a form of security taken to cover you from losses related to identity theft. It reimburses the victim’s money lost due to a case of fraudulent activities and repairs your credit report. The cost can range from phone bills to legal support when hiring specialists to guide you through the identity restoration process.

Identity theft insurance policies cost between $25 and $50 a year. Identity theft benefits range between $10,000 and $15,000. However, the rates for private insurance brokers differ, like the Experian IdentityWorks Plus policy that covers up to $1 million benefits.

If you are not sure about your identity’s security, you can immediately check your credentials and report discrepancies. Visit IdentityTheft.gov to get help on how to identify identity theft and repair the damages.

What Does Identity Theft Insurance Cover?

What does identity theft insurance cover differ from one insurance policy provider to the other. Some will pay for the ordinary expenses until you rebuild your credit reputation, while you might have to pay that from your pocket with other policies.

The ID theft insurance cover reimburses you the total amount spent reclaiming your identity. Depending on the policy covering you, the following expenses may be included in the coverage:

• Child care cost 
• Credit monitoring services
• Copies of your credit reports
• Long-distance phone calls 
• Lost wages
• Mailing documents 
• Legal fees
• Notary fees

NOTE: Identity theft insurance cover does not compensate for direct financial losses. It only covers some expenses you may encounter due to identity theft or when trying to rebuild your identity.

How Do You Claim Identity Theft Insurance?

An identity theft insurance policy is a proactive step in protecting your personal and financial information. However, you might realize that you somehow paid for a hotel room in Kansas when you have never set foot out of town.

In that case, you should file for an identity theft claim.

The steps are simple:

1.  If you notice any suspicious activities on your accounts, start reporting this to your identity theft policy provider.
2. Proceed to call the company where your identity is being used.
3.  Also, notify the police about the case, fill out the identity theft claim and ask for a report copy.

Then, report the case to the FTC and get proof of the businesses conducted by the person stealing your identity. Finally, report to your service provider and determine the next steps based on what your plan’s coverage stipulates.

Final Thoughts

Several identity theft protection services can help you deal with the aftermath of identity theft. Usually, these services offer guidelines on protecting your personal information and monitoring your public and private records.

These services also notify you when transactions and status change to help you quickly resolve your ID theft issues. Notifications from such services will call for immediate action, like closing the account, after which you can file a claim for your identity theft insurance with your service provider.

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