December 16, 2009
The Insurance Consumer Advocate would like to share some information regarding Identity Theft Insurance with consumers in recognition of December as Identity Theft Awareness Month. Identity theft has become a national concern affecting an estimated 10 million consumers in the United States in the last year. Because restoring your credit history and correcting information is a slow and time-consuming process, consumers are being inundated with offers for identity theft insurance, credit monitoring plans, and other services.
If you are a victim of identity theft, it can be very costly to reestablish your credit and identity. Several companies are now offering identity theft insurance, which generally costs between $120 and $180 per year. Identity theft insurance cannot protect you from becoming a victim of identity theft and does not cover direct monetary losses incurred as result of identity theft. Instead, identity theft insurance provides coverage for the cost of reclaiming your financial identity, such as the costs of making phone calls, making copies, mailing documents, taking time off from work without pay (lost wages) and hiring an attorney.
Consumers who are interested in purchasing identity theft insurance should inquire about policy limits, deductibles, and other policy terms. Most identity theft insurance policies have policy limits of $5,000 for lost wages. Consumers should also inquire about deductibles. Some policies require you to pay the first $100 - $500 of costs incurred for reclaiming your financial identity. Remember, identity theft insurance does not cover direct monetary losses. If the policy covers lost wages, verify what limits apply and what is required to trigger this coverage. If you are a salaried employee or are required to request vacation time in the event of a work absence associated with reclaiming your financial identity, you may not have unpaid leave and lost wages. If the policy covers legal fees, verify what limits apply and if legal work needs to be pre-approved by the insurer.
Consumers should also check to see if their current homeowner’s insurance includes identity theft insurance. If not, you may be able to add identity theft insurance to your homeowner’s policy for a small fee or purchase a stand-alone policy from another insurer, bank or credit card company.
As with any insurance product, consumers should understand what they are purchasing and compare the product’s price, coverage and deductibles among multiple insurers.
If you have any questions regarding Identity Theft Insurance you should contact the Division of Consumer Services within the Department of Financial Services on-line at http://www.myfloridacfo.com/Consumers/ or by phone at 1-877-MY-FL-CFO (1-877-693-5236), toll-free in Florida, and (850) 413-3089 from out of state.
The Insurance Consumer Advocate is appointed by Florida Chief Financial Officer Alex Sink and is committed to finding solutions to insurance issues facing Floridians, calling attention to questionable insurance practices, promoting a viable insurance market responsive to the needs of Florida’s diverse population and assuring that rates are fair and justified.