In 2010, 8.1 million Americans became victims of identity theft. According to a Javelin Strategy & Research survey, the average victim lost $600. In addition, the Identity Theft Resource Center estimates the average victim spends 607 hours clearing his or her financial records and restoring his/her credit rating.
Some homeowners policies, particularly high-end ones, automatically include some coverage for identity theft. If yours does not, you can add coverage to an existing policy by buying a coverage endorsement, or you can buy a standalone policy.
Identity theft coverage does not cover direct monetary losses incurred due to identity theft. Most credit cards limit your liability for unauthorized charges to $50, making this coverage unnecessary. Identity theft insurance does cover some of the expenses you incur to fix the problem, such as the costs of making phone calls and copies, mailing documents and possibly legal bills. Some companies also give policyholders access to fraud specialist who will guide them through the process of cleaning their records and protecting their identity.
Identity theft insurance is very affordable—usually $100 or less per year, a small price to pay for peace of mind!