With data breach after data breach hitting the newswires, many Americans are wondering what they can actually do to protect themselves from identity theft.
Unfortunately, once your data is out there, it’s hard to roll back the clock. A major data breach of personal identifying information like your name, Social Security number and birthdate puts some incredibly valuable keys in the hands of … well, just about any fraudster or hacker with the willpower and know-how. That’s a pretty scary proposition, and it leaves consumers and business owners alike looking to protect their identity and their credit.
So, where do you turn? If you’ve been involved in a data breach, you may have been offered a free identity theft or credit monitoring product for a set period of time by the company who suffered the breach. These products can differ in what they offer, so you should always read through the terms and conditions before you sign up to make sure you understand the protections you’re getting, how to take full advantage of the offering and what you may be giving up to get the benefits (some may require you to sign a clause limiting your rights to sue, for example). Often these products are simply credit monitoring, with few perks that go the extra mile to help you mitigate or resolve an identity theft issue.
Here we dive into what identity theft insurance products can do to help you monitor and catch identity theft before it happens and resolve issues if you actually become a victim of fraud or identity theft.
What Is Identity Theft Insurance?
The first thing you should know about identity theft insurance is that every product is different. Some kinds of identity theft insurance offer proactive monitoring and resolution services, some offer reimbursement (up to a certain amount) for wages lost in dealing with identity theft issues, some will provide experts to help you file police reports and other government documents. The details can vary drastically.
Here are a few common features of top-rated identity theft insurance policies and some tips for taking full advantage of what they have to offer.
Identity Recovery Resources: Most identity theft insurance policies have dedicated support assigned to help covered individuals resolve an identity theft incident. This may involve a hotline you can call to talk to an identity theft recovery specialist who can help you file police reports with the proper agencies and get new documents reissued in some cases.
Wage Reimbursement: In severe cases of identity theft, you may need to take time off of work to appear in court to testify or file paperwork. Some identity theft insurance policies will go so far as to reimburse you for lost wages if you have to appear in order to restore your identity.
Legal Defense Restitution: Identity thieves often open new accounts in your name and then default in order to get the most cash they can without you noticing. That leaves lenders in a tough place — they want to get repaid and they leant the money to “you” — or at least they thought it was you. They may take you to court to try to get their money back long after the fraudster has disappeared and you may need to hire legal representation to be made whole. There are other instances when it comes to identity theft that may require legal filings as well. A quality identity theft insurance policy will often offer legal defense coverage as part of the standard offering.
Identity Theft Monitoring vs. Identity Theft Insurance
A common question for many consumers is whether they need monitoring or insurance. Sometimes, an identity or credit monitoring product may offer insurance as well, and vice versa, but often the two are conflated as the same when they’re in fact quite different. Identity monitoring products are designed to alert you if your data or personal information is being traded on the Dark Web or other known hacker sites as well as if there’s potential fraudulent activity on your credit profile. Identity theft insurance products are more focused on the resolution of fraud or identity theft after the fact.
If you’ve been the victim of a data breach, either product can be helpful, it just depends on the level of protection you’re interested in and how confident you feel in managing your way through resolution processes if you do become a victim of identity theft. Keep in mind that some kinds of identity theft can take minutes to resolve or straighten out, others can take years and lots of red tape.
Where to Get Identity Theft Insurance
You can get identity theft insurance a number of places.
Your employer may offer it as a free benefit paid for by them as a perk, or as an additional benefit you can opt into for a small monthly fee for yourself, your spouse and your family. Some health insurers also offer them as a rider on some policies. You may already be covered and not even realize it!
Business owners who have to search for their own health insurance coverage may have more difficulty finding identity theft insurance. It’s increasingly being offered as an add-on to many services and tools for business owners (a good example — you can get identity theft insurance and credit monitoring through a Premium account on Nav).