Why You Don’t Need Identity Theft Insurance

In the last decade many of the major insurance companies have been looking for ways to acquire that last nickel from you, so they have come up with all sorts of gimmick insurance plans such as cancer insurance and short term disability insurance in order to separate you from your money. We all need favorable health insurance, auto-insurance and a good home owners policy, but some of these policies are getting to be a bit much. One of the most recent entries into the list of gimmick insurance policies is that of identity theft insurance.

The Federal Trade Commission tells us that there are 9 million victims of identity theft each year, and because of that it makes sense for us to get some extra protection on ourselves, but do we really need a policy for it? MarketWatch states that ID theft insurance will provide at best “minimal extra protection.”

Here’s how it works. The companies will monitor your credit for a nominal fee to see if you have become a victim of identity theft, however you can monitor it your self for free. You can go to annualcreditreport.com and pull one of your three credit reports every 4 months, and that intention you know what’s happening on your credit. That’s all most identity theft programs do anyway. There’s nothing in identity theft insurance programs which prevent you from getting your identity stolen, rather it just informs you if it happens, and leaves you to spruce up the mess. Most of the time ID theft insurance doesn’t even give you any money for all of the time and hassle that you get to deal with to take care of the fact that you have had your identity stolen.

Let’s take a look at one particular policy from AIG. Their Personal Identity Coverage Plan covers the following services: available identity theft specialists which will guide you through the process of restoring your identity, a guide with form letters to send creditors, coverage provided for lost wages as a result of time off work because of ID theft, expenses related to the recovery of an identity, and additional assistance through MatLife’s Identity Theft Resolution Service. Most of these services you can find on the internet yourself without the help of an expensive policy. The monetary reimbursement might be nice for time off work, but if you do it after 5:00, there’s no need to take the time off. Most likely you are probably better off working by yourself to take care of your identity theft.

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