What should you check before buying identity theft protection?

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By: Phil Bradford
on 16th Nov,2016

Identity thieves are waiting to con you. Don’t be a victim of identity theft. Also, find out what to check before buying identity theft insurance.

Whether or not you’ve been a victim of identity theft, it's always wise to buy an identity theft protection. It’s better to be safe than sorry.

If the FTC is to believe, 9.3 million individuals fall victim to identity theft every year.

As data breaches and online hacking are regularly making the headlines, people are buying more and more identity theft insurance.

2016 Breaches Identified by the ITRC as of 17.5.2016.

  • Total Breaches: 399
  • Records Exposed: 12,041,646

Your personal information is a priceless possession. So, you must be extra cautious while purchasing identity theft insurance.

You must find out the answers to these questions before buying your identity theft protection:

1 Is your insurance company reporting to all the three credit bureaus?

In most cases, the companies offering identity theft insurance do not report to all the three credit bureaus. Rather, they report to one or two of them. Since all your financial records are not equally updated in the 3 credit reports, you may face financial hardships later. So, before purchasing identity theft protection, ask the insurance company whether or not they’re reporting to all the 3 credit bureaus.

2 Is your insurance giving you enough protection?

If your identity gets stolen, the identity theft insurance won’t cover any loss of money.

For instance, if a fraudster takes out a loan in your name and then escapes with the money, your identity theft insurance won’t cover up that loss. It only covers the expenses related to the actions you need to take to get back your identity such as costs for making phone calls, legal bills, and so on.

3 Is there a deductible?

The majority of the identity theft insurance companies has a deductible varying between $100 to $1000. Therefore, if your financial loss is below your deductible, you’ll have to pay for it out of your pocket first. Considering the fact that most identity theft victims spend below $1,500 to get back after identity theft, the insurance may well not be worthy of the cost.

4 Is your credit card offering free identity theft protection?

A few credit cards offer free identity theft insurance. So, if your credit cards offer the same, then it doesn’t seem sensible to pay for identity theft protection from another source.

Also, check out if you have access to “free identity theft protection or credit monitoring through your employee benefits program, credit union or membership in organizations such as AAA.”

5 Is your insurance company providing free identity theft protection?

If an institution offers you free identity theft protection, find out whether or not it’ll always be free.

Do you want being charged a payment for the same service months, or even a year later? Of course not! Some institutions do this and don’t even inform you when you sign up for their identity theft insurance.

6 Is your insurance covering all aspects of your identity?

According to consumer advocates, it’s a bad idea to buy any single use insurance. For instance, you must buy health insurance that gives protection to all aspects of your physical health, rather than purchasing the one that only covers diabetics.

7 Is DIY identity theft protection the best option?

When it comes to protecting your identity from the swindlers, DIY is the best method ever. Rather than purchasing identity theft insurance you can simply monitor your credit reports from all the three credit bureaus at regular intervals and review your credit card and bank statements. Keep a close and careful watch of your personal details and make sure nothing is wrong.

8 Is your insurance company offering fraud alerts?

To ward off identity theft, the clients receive fraud alerts or credit freezes from only some ID theft insurance companies. So, before making any major decision, make it a point to ask about this to the insurance company.

Another hassle-free way to protect your identity is to place a free 90-day credit alert at all the major credit bureaus.

What you need to do is to notify only one credit agency, and that agency will inform the other two.

With the help of fraud alert, you’ll be notified by the credit bureaus if anyone tries to take out credit in your name.

The agency will call you to check whether or not it’s you who is doing it. On the 91st day, you can set another fraud alert. You can do this consistently with simply a phone call.

9 Do you know the cost?

Purchasing identity theft insurance is worth $25 to $180 a year. If you start taking care of your identity all by yourself, somewhere you’re saving every bit of your precious dollars.

These are some important questions which you should ask the insurance company and yourself before taking the plunge of purchasing identity theft protection.

Your identity is as precious as gemstones; so, protect it from the hands of the fraudsters. Remember, your identity is your everything!

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