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Why Identity Theft Insurance Isn’t Really That Helpful

07.22.2009 · Posted in Home and Garden Articles

Personal identity theft has become a lot more newsworthy lately. Some experts say that it’s receiving much more attention than it should. It has become so common in the news that there is now an insurance to cover it called personal identity insurance.nnWhat Does It Cover?nnThe insurance itself generally costs about $25 to $50 per year and covers from $15,000 to $25,000 of costs including lost wages from time to taken off from your job to deal with the fraud problem. Coverage for job loss is usually capped at $500 per week for a maximum of four weeks. This insurance may also cover some legal fees.nnSome insurance may also cover special mailing charges to mail fraud affidavits to the correct people. Fees for credit cards and loans that were applied for and rejected due to false information are at least partially covered.nnAny long distance charges to banks etc. to discuss the fraud can also be covered.nnThis may seem like a good deal for the money but keep in mind a few things. Identity theft is very unlikely. The chances of being victimized are only about 0.35%. Chances are it will never happen to you.nnSecondly, although the coverage from personal identity theft insurance may seem to be extensive, when broken down into its parts it is really not very beneficial. For example, although the lost wage coverage sounds good, it is only $500 per week (less than what many people would need to replace) and it does not take into account the fact that many people would not be able to take that much time off of their jobs.nnPersonal identity theft coverage doesn’t fix your credit or criminal record as home or auto insurance might do. It strictly helps with the expenses so you can fix it on your own. The expenses entailed generally don’t surmount $1,000 so you may find that purchasing a policy is of no benefit.

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