Is Identity Theft Protection Worth It?
Identity theft in America is out of control. Equifax reports that nearly 15 million Americans experience identity theft each year. Financial identity theft is the most frequent type. Almost half of adult Americans say that they experienced identity theft.
Is Identity Theft Protection Worth It?
A study by Javelin found that the average loss from identity theft was $1,100. Other estimates have this amount at $1,386. Since most Americans cannot handle a $500 emergency expense by using their savings, this loss is intolerable for most people.
Worse than the loss of money is an incredible hassle. Identity theft means people must change their passwords and close their credit and bank cards to get new ones. They also must track their credit reports for fraudulent activity to be able to dispute anything suspicious.
Even though the average loss is $1,100 to $1,400, some people lose tens of thousands of dollars in some identity theft cases.
How Much is Stolen by Identity Theft Each Year?
Is identity theft protection worth it? It is easy to see the answer is a resounding yes.
The Aite Group reported that 47% of Americans suffered from identity theft in 2020. The total losses in 2019 were $502.5 billion.
This amount increased by 42% to be much higher in 2020. The losses totaled up to a staggering total of $712.4 billion in 2020. All this stealing happened during the pandemic when things were generally going badly for many people.
Who is a Likely Victim of Identity Theft?
If you are wondering, is identity theft protection worth it for you? The greatest number of consumers in 2020 who were victims of identity theft were between 35 and 44 years old. They were 30% of all victims of identity theft.
Identity Theft Complaints are on the Rise
The Federal Trade Commission (FTC) tracks the complaints made by consumers about fraud and identity theft. In 2020, the FTC collected 4.8 million fraud and identity theft complaints. The amount reported was a year-over-year increase of 45% from 2019, with only 3.3 million such complaints.
The Top Five Categories of Identity Theft in 2020
Government Benefits
There were 394,324 reports about false applications for government benefits programs with the funds received by imposters.
Credit Card Fraud
365,597 reports about identity theft used to open new credit card accounts fraudulently.
Business Loan or Personal Loan
There were 99,667 reports in this category.
Tax Fraud
There were 89,831 reports in this category.
Misc. Fraud
This catch-all category includes things like store cards, gas cards, and student loans. There were 281,434 reports made in this category.
In total, these top five categories of identity theft accounted for 1,230,413 reports.
Identity Theft Insurance
The top ten insurance underwriters that provide identity theft insurance protection are:
| Top Insurance Underwriters | Percent of the total number of policies | |
|---|---|---|
| 1. | Nationwide Mutual Group | 13.9% |
| 2. | State Farm | 13.7% |
| 3. | Travelers Companies Inc. | 10.0% |
| 4. | Hanover Insurance Group Inc. | 5.6% |
| 5. | Liberty Mutual | 5.5% |
| 6. | Allstate Corp. | 4.5% |
| 7. | Farmers Insurance Group of Companies | 4.4% |
| 8. | American Family Insurance Group | 4.3% |
| 9. | Erie Insurance Group | 3.7% |
| 10. | Mercury General Corp. | 2.8% |
What Does Identity Theft Insurance Cover?
While each underwriters’ policy coverage may be different, in general, identify theft insurance covers the following reimbursable expenses:
- Legal Fees:The fees you pay for an attorney and court filings to help you resolve identity theft issues
- Lost Wages:This is the time you have to take off from work to resolve identity theft issues
- Other Expenses:These are expense items associated with your efforts to resolve identity theft. This category may include mailing costs, photocopying expenses, phone bills, and notary fees
Be aware that identity theft protection policies do NOT usually cover the actual financial or cash loss. If someone steals money from you, you may be stuck with the financial loss.
The best insurance policies for identity theft problems offer up to $1 million for reimbursable expenses. Be sure to read the fine print in the insurance policy to understand exactly what is covered and what is not.
At the Goalry Mall, you can use the Insurry store to shop for all kinds of insurance, including identity theft protection insurance.
Keep Your Credit Clean With the Creditry Store
How Can You Avoid Identity Theft?
The best advice I can give you is to be proactive about your financial health. Use the tools found at Goalry Mall to stay on top of things.
Creditry – The Creditry store is useful for monitoring your credit score and ensuring no identity theft happens. You can see what credit and loans are in your name by getting your credit reports from the three major credit reporting agencies, Experian, Equifax, and Transunion.
Daily monitoring of your credit activity and alerts for suspicious charges will help you stay on top of any fraudulent attempts to use your identity.
What Should You Do if You Suspect Identity Theft?
The key to reducing this problem is to take immediate action if you suspect identity theft has occurred.
1.Create a Fraud Alert
Contact the fraud department of one of the three credit reporting agencies of Experian, Equifax, or Transunion. Any report filed with one of these agencies automatically gets sent to the other ones.
2.Check Your Credit Reports
Regularly check your credit reports to see if they contain any information about loans or credit accounts that you did not authorize. Keep an eye out for changes of address to places you do not recognize.
3.Work With Credit Agencies
Dispute fraudulent entries on your credit reports. Work with the credit agencies to have them removed.
4.Freeze Your Credit Reports
On the systems of these credit-reporting agencies, you can turn off the ability for lenders to make inquiries about your credit history by freezing the account. On some systems, this is a free service. On others, a fee may apply. Turn the systems back on by unfreezing them when you apply for a loan or credit card.
5.Work with Credit Card Companies
Most credit card companies have a policy to reverse fraudulent charges. However, you may have to prove you did not authorize the charges. It helps if you take immediate action to dispute anything fraudulent.
6.Contact All Lenders, Banks, and Insurance Companies
Tell them what is happening and ask them to close the accounts and open new ones with new security information and new PINs.
7.Change Passwords
Change passwords to new, complex passwords using numbers, small/upper case letters, and special characters. Never use the same password twice. Change your passwords frequently. Using an encrypted password service to save all your complex passwords is helpful, so you do not have to remember them.
8.Be Cautious About Sharing Personal Information
Make sure you have a high level of trust when you give personal information. Be extremely careful with urgent emails that request personal information. Exercise caution even if they appear to come from a legitimate source. A technique called “phishing” may be masquerading as a legitimate source with an attempt to trick you into revealing personal information.
9.Opt-Out
If possible, opt out of systems that collect and share your personal information.
10.Do-Not-Call Registry
Add your phone number to the national do-not-call registry to block unsolicited telemarketing calls.
11.Secure Your Devices
Consider using biometrics (fingerprint or facial scanning) to secure any devices that have your personal information stored on them. Keep your mobile phone screen locked when not in use.
Learn more about identity theft and how to deal with it. If you have been a victim of identity theft, make a report on the FTC website.
The Bottom Line
Is identity theft insurance worth it? Certainly, it offers some peace of mind at a modest monthly price. It is worth it for most people because identity protection insurance usually comes bundled with credit monitoring services. The main thing I would suggest is monitoring the daily activity on all of your credit cards, bank cards, and bank accounts. If something looks suspicious and you do not recognize the entry, report it immediately.