Thursday, October 16, 2014

Do You Need Identity Theft Insurance?

The recent theft of personal celebrity pictures from the cloud once again demonstrates how insecure content and data stored online can be. Even if you are a “traditionalist” and keep your data only on your hard drive, you’re still not safe. Hackers, malware and phishing are increasingly more sophisticated, so much so, that it has become a constant battle to fend off these attacks. Cyber strikes are always without warning and any security software or patches to combat the infiltration is developed subsequently.

According to the Federal Trade Commission, (FTC), the major complaint from consumes, for the past 14 years, has been ‘identity theft’. If you have been a victim of your identity being stolen, you will certainly be aware of how disastrous this can be, especially if you have suffered:
  • Financial losses
  • The pain of having to live with poor credit
  • The enormous amount of time and effort needed to reestablish your identity and credit
  • The sense of personal violation

If you are yet to become a victim of ‘identity theft’, it could mean that the security measures you have in place are protecting you right now, but it does not take away the threat of your personal data being stolen. In a world where security services can only play catch up with the cyber criminals, can you ever be totally, completely safe? Or should you seriously consider the advantages of an identity theft insurance cover.

Identity Theft Insurance – Pros and Cons
Pros
  • According to the National Association of Insurance Commissioners, the average cost of identity theft insurance ranges from $25 to $60 per year
  • It may include account and credit monitoring, credit alerts and reimbursement of cost of repairing your credit history
  • The typical benefits under the policy are limited to $10,000 to $15,000. Additionally the deductibles can be as high as $500 or more
  • Some insurance companies provide extra services in guiding the injured party through the complex processes of notifying the credit reporting agencies in order to help recover their credit
Cons
  • Identity Theft Insurance has a limited scope
  • The policy will not cover any financial losses
  • The mental, emotional and psychological impact of being an identity theft victim can be immensely traumatic
To buy or not to buy
  • The cost of insuring yourself against identity theft is comparatively imperceptible but given the limitations of the policy plans, gives pause for thought
  • The need to protect against ID theft still remains. Many people opt for credit monitoring services. If you have the wherewithal or the time, you could monitor your credit, constantly. If, however, you do choose to employ the services of a professional credit monitoring service to monitor your credit, the charges thereon for the service is only $10 per month
  • There are companies like American Express that provide free ID theft protection to all their cardholders
  • Covering against Identity theft gives you peace of mind and the insurance agency will generally provide you with a dedicated advocate who will work on your behalf
  • Some insurance companies will immediately notify you to allow you to take immediate action
  • In case of any detection of breach of your identity, an immediate alert is sent out to you
  • In some plans the ID Theft Insurance covers loss of your wallet and credit cards, whilst you are travelling
  • Some insurance companies may reinforce their plans to include online protection such as:
  • Anti-key logging software which has the ability to delete or immobilize hidden key stroke loggers
  • A Phish-blocker that detects phishing sites and immediately opens a warning page to alert you

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