What is Identity Theft Protection Insurance?
Identity Theft Protection Insurance
Many companies refer to their services as identity theft protection services. This service is specifically dedicated to protecting personal information and preventing it from being stolen. These companies offer monitoring and recovery services. Monitoring services watch for signs that an identity thief may be using your personal information. Recovery services help you deal with the effects of identity theft after it happens.Monitoring and recovery services usually go hand in hand. They include usually services and accesses like credit reports or credit scores.
There are two basic types of monitoring services — credit monitoring and identity monitoring.
Credit monitoring tracks activity on your credit reports at one, two, or all three of the major credit reporting agencies (CRAs) — Equifax, Experian, and TransUnion. If you spot activity that might result from identity theft or a mistake, you can take steps to resolve the problem before it grows. Usually, credit monitoring will alert you when:
- a company checks your credit history
- a new loan or credit card account is opened in your name
- a creditor or debt collector says your payment is late
- public records show that you’ve filed for bankruptcy
- there is a legal judgment against you
- your credit limits change
- your personal information, like your name, address, or phone number, changes
Credit monitoring only warns you about an activity that shows up on your credit report. But many types of identity theft won’t appear. For example, credit monitoring won’t tell you if an identity thief withdraws money from your bank account, or uses your Social Security number to file a tax return and collect your refund.
Some services only monitor your credit report at one of the CRAs. So, for example, if your service only monitors TransUnion, you won’t be alerted to items that appear on your Equifax or Experian reports. Prices for credit monitoring vary widely, so it pays to shop around.
Questions to ask credit monitoring service providers:
- Which credit reporting agencies do you monitor?
- How often do you monitor CRA reports? Some monitor daily; others are less frequent.
- What access will I have to my credit reports? Can I see my reports at all three CRAs? Is there a limit to how often I can see my reports? Will I be charged a separate fee each time I view a report?
- Are other services included, such as access to my credit score?
Identity monitoring alerts you when your personal information — like your bank account information or Social Security, driver’s license, passport, or medical ID number — is being used in ways that generally don’t show up on your credit report. For example, identity monitoring services may tell you when your information shows up in:
- change of address requests
- court or arrest records
- orders for new utility, cable, or wireless services
- payday loan applications
- check cashing requests
- social media
- websites that identity thieves use to trade stolen information
To find out if your information is being misused, identity monitoring services must check databases that collect different types of information to see if they contain new or inaccurate information about you. For example, they might check the National Change of Address database to see if anyone is trying to redirect your mail. The effectiveness of the monitoring will depend on factors like the kinds of databases the service checks, how good the databases are at collecting information, and how often the service checks each database. There also may be information that a service cannot monitor. For example, most monitoring services can’t alert you to tax or government benefits fraud, including Medicare, Medicaid, welfare, and Social Security frauds.
- Questions to ask identity monitoring providers:
- What kinds of information do you check, and how often? For example, does the service check databases that show payday loan applications to see if someone is misusing your information to get a loan?
- What personal information do you need from me and how will you use my information?
- Are other services included with the identity monitoring service? Do they cost extra?
Identity recovery services
Identity recovery services are designed to help you regain control of your good name and finances after identity theft occurs. Usually, trained counselors or case managers walk you through the process of addressing your identity theft problems. They may help you write letters to creditors and debt collectors, place a freeze on your credit report to prevent an identity thief from opening new accounts in your name or guide you through documents you have to review. Some services will represent you in dealing with creditors or other institutions if you formally grant them the authority to act on your behalf.
As with any insurance policy, there may be a deductible, as well as limitations and exclusions. Also, most policies don’t pay if your loss is otherwise covered by your homeowner’s or renter’s insurance. If you’re interested in identity theft insurance, ask to see a copy of the company’s terms and conditions.
The issue of identity theft is swimming at a very high rate in the U.S. Over 13 million cases are reported every year. This is not a time to resort to being careful only as carefulness without commensurate action might not yield results. Identity theft protection insurance companies are everywhere. They help to monitor as well as recover stolen items. Your identity is your strength and when tampered with, your reputation and integrity are on the line.