In 2019, 14.4 million people were victims of identity theft. Identity theft can happen in many ways: in-person, online, over email, or on the phone. However it occurs, identity theft affects a large number of people per year.
It can cost the victim considerable time and money to fix the mess left in the wake of identity theft. That’s where having identity theft insurance can come in handy. Identity theft insurance can be used to help protect yourself against thieves, hackers, and other criminal scammers. Here are some of the facts surrounding identity theft insurance so you can make the right decision when it comes to obtaining your own coverage.
Long-Term Effects of Identity Theft
It can take months or even years to untangle the mess left by identity theft. It can be difficult and stressful to deal with - especially if you don’t have insurance. You may recover some of the money stolen from you, but not all the lasting effects will be financial. It can also lower your credit score, make it harder to get a loan, and even affect your job prospects.
Ultimately, you want to do everything you can to protect your identity by keeping your personal information safe. This includes making sure all your records, identification items such as your passport, social security card, and birth certificate are kept in a fireproof safe, and old banking records and statements are shredded.
When it comes to cybersecurity, keeping all your online information safe from hackers is important. Regularly update passwords, don’t allow other people to access your records, and be careful about the information you share on social media. Criminals are always looking for personal information that may make it easier for them to steal your identity or impersonate you. With the information they’re able to find online, they can take out loans or open up credit cards in your name.
What Does Identity Theft Insurance Cover?
Identity theft insurance will usually, at the most basic level, cover the monetary loss from the theft. It can also include coverage for the cost of restoration services that help get your affairs untangled, including a case manager or fraud specialist that will be able to do the legwork and spend the time it takes to recover your identity.
The cost to replace your identification papers, like passport and birth certificate, will be covered as well. If you need an attorney, your legal fees will also be covered under your identity theft insurance policy.
How To Get Identity Theft Insurance
Certain homeowner’s insurance policies, or even renters insurance, will offer a rider or endorsement at an additional cost to you. This would act as an extension of your regular policy that covers identity theft. It might be an extra couple of bucks per month, but it will cover losses or other expenses typically not protected by your normal homeowner's policy.
Before you decide to purchase identity theft insurance, it’s important to find out the policy limits, how much your deductible will be, how much money loss it actually covers, and if legal fees or restoration services are included. The more comprehensive and complete the policy is, the more you’ll be covered if identity theft happens to you.
Erickson Braund is the Founder and Chief Financial Officer at Black Walnut Wealth Management. He is a Certified Financial Planner®️ professional and a Chartered Retirement Planning Counselor®️. Eric brings over 20 years of experience working with high net-worth individuals and families, helping them achieve their goals of protecting and growing their wealth for retirement and for generations to come. Because Eric is a CFP®️ professional, he adheres to high ethical standards and engages in at least 30 hours of approved continuing education in the financial industry each year.
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