Saving You Money For Life

With so many people worried about identity theft, ‘identity insurance’ is hot right now. But although the cost often seems reasonable, the benefits are usually very limited and “typically not worth the money,” according to editors of Consumer Reports magazine.

Nobody is really sure how many people are victimized by ID theft each year. The Federal Trade Commission puts the figure at about 9.3 million individuals. A recent report by the Justice Department estimates that 3.6 million households were victimized. The majority of these cases involve a stolen credit card number, not the more serious crime of trying to steal someone’s identity by opening accounts and getting fake ID in their name.

The National Association of Insurance Commissioners cautions consumers that insurance “cannot protect you from becoming a victim of identity theft and does not cover direct monetary losses incurred as a result of identity theft.” It simply covers some of the expenses you will incur to deal with the problem, such as the costs of making phone calls and copies, mailing documents and possibly legal bills.

So what are you buying? Coverage typically costs from $20 to $100 a year, as a rider to a basic homeowner’s policy or as a stand-alone purchase. Throw in the cost of the deductible and the fact that usually there’s no coverage for lost time from work or legal fees – and what it seems you’ve got is window dressing. Money for a pair of scissors to cut up the old credit card.

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