October 28, 2010
As many as 9 million Americans were victims of identity theft, according Federal Trade Commission estimates. Typically, it involves the theft of a piece of personal information such as a PIN, Social Security Number or Driver's License that the thief uses for his or her own personal gain. Thieves obtain your personal data in any number of ways: they steal your wallet, tamper with ATMs, break into your mail box, plough through your trash, access your computer via a virus or trick you with a phishing scam. Forty-three percent of the time, you actually know the thief! The non-profit Identity Theft Resource Center (ITRC) says that if you're an identity theft victim, you can look forward to spending anywhere from 68 to 141 hours cleaning up the mess. ITRC also claims that on average, it will cost you about $527 dollars out-of-pocket to repair damages done to an existing personal account. The cost of clearing up a new account opened fraudulently in your name is immeasurable. And then there's the damage done to your credit record. None of this needs to happen if you take advantage of a little-known service available from many major insurance providers.
Identity Theft Restoration Coverage is a relatively inexpensive optional endorsement that can be added to your homeowners insurance or renters insurance. For as little as $25 extra a year, you can be reimbursed for losses that result from any covered identity fraud, up to the extent of your policy. Typically, your insurer will assign a case manager to work directly your creditors, affected businesses and the credit bureaus to correct the damages and clear up your good name. That alone will save you countless hours dealing with phone trees, waiting on hold and sending multiple copies of letters.
Generally, Identity Theft Restoration Coverage attached to your homeowner's insurance policy will also take care of the costs associated with identity theft. These can include the cost of getting credit bureau reports, notary fees, phone calls, postage and shipping, fees to reapply for loans, lost wages and financial institution charges to recover control of your personal identity.
If you have homeowner's insurance or renter's insurance, talk to your agent about adding this bargain-priced coverage. Or, if you're currently shopping for homeowner's insurance or renter's insurance, you can ask to have the optional Identity Theft Restoration endorsement added to your quote.
Of course, you can and should take proactive steps to prevent becoming a victim of identity theft.
- Never let your purse or wallet out of your sight and avoid carrying around an excessive amount of personal information. For example, leave all but one credit card at home.
- Beware of people looking over your shoulder when entering your PIN at an ATM. Take your receipts with you and dispose of them safely once you're home.
- Never give out any personal information such as a credit card or SSN to anyone on the phone or Internet unless you have initiated the procedure and know that you are dealing with a reputable company via a secure system.
- Monitor all your accounts on a regular basis. Once a week is not too often. Take advantage of your right to a free annual credit report from one of the major credit bureau. Then pay for the other two.
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