Identity Theft Insurance Limitations

Identity theft insurance can’t prevent you from being a victim of fraud. It also can‘t reduce the time and hassle for clearing your name if you are a victim of identity theft.

Always read the fine print of any policies you take out and make sure it is what you want. Many policies have so many limitations, exclusions and rules.

Records indicate from 2005 over 217 million American consumers were exposed to risk of identity theft.

Many companies offer identity theft prevention and resolution services for a fee but will you get what you pay for? A service may offer limited defenses against some types of identity theft but there are numerous ways thieves use your information.

When a family member is the perpetrator, most companies have exclusions. Many companies claim to have their own “identity theft specialists.” These employees can only guide you and have limited training and resources to offer. Each time a thief uses your information it starts a new case all over again. It means more paperwork, new expenses and time to clear your name and credit report again.

If a thief steals your credit card, you are only held accountable for the total amount of fraudulent charges if you do not notify the company within 60 days, but often the time window is waived.

Though many cardholders believe a policy will pay off the card completely, the reality is that most plans only cover the minimum payments. And even if you have the insurance, the company may make it difficult for you to collect.

Check with your credit card company for their exact policy.

Credit monitoring was developed before we had identity theft. These services are not designed to prevent fraud or identity theft.

Banks and financial institutions lead the consumer to think that it does. A consumer can obtain a free credit report of their own information every twelve months. There are credit monitoring services available to notify you if activity takes place.

Make sure the company you choose to use will be checking with all three credit bureau companies or you will still be left vulnerable. Sometimes it takes a month or two before a newly opened account appears on your credit file.

Thieves also sell your information to other thieves when they are finished using it.