Certain aspects of identity theft can be covered by your home insurance.
Standard homeowners insurance policies don’t typically cover identity theft. But this crime has become a bigger problem in recent years. A 2018 report from Javelin Strategy & Research reveals that 16.7 million people became victims of identity fraud in 2017, resulting in more than $16.8 billion in losses. This is a record high.
A 2018 report from Javelin Strategy & Research reveals that 16.7 million people became victims of identity fraud in 2017, resulting in more than $16.8 billion in losses. This is a record high. CLICK TO TWEET
For the first time, thieves stole more Social Security numbers than credit card numbers. When this personal information is stolen, an identity thief can take out a loan, withdraw money, create a new bank account or open a credit card under their victim’s name. This is arguably much more serious and harder to reconcile than stolen credit card information.
Many insurance companies offer endorsements that protect policyholders who become victims of identity theft. To find out more about how these endorsements work, we spoke to our director of underwriting, Mike Gulla. Check out what he had to say and find out whether you need additional identity theft insurance.
What do homeowners insurance identity theft endorsements cover?
A few providers include identity theft coverage in their basic policies, but you’ll have to buy an endorsement (also known as a rider) in most cases. This often costs between $25 and $60 a year. It may be available through your current provider or it can be purchased as a stand-alone product from another company. In general, these endorsements focus on recovery costs and restoration services. Being an identity theft victim can have a negative impact on your credit and cause other financial problems.
Some home insurance providers include identity theft coverage in their basic policies, but you’ll have to buy an endorsement (also known as a rider) in most cases. This often costs between $25 and $60 a year. CLICK TO TWEET
After someone steals your identity, getting your financial life back in order can take time. There will be phone calls you’ll need to make, packages you’ll need to send and documents you’ll need to replace. Some companies also assign victims a fraud specialist or case manager that can provide step-by-step guidance. They often deal with credit bureaus and other companies on the victim’s behalf. Some insurance providers, include coverage against cyberbullying and reputational harm online. Keep in mind that cyber protection policies typically have limits between $10,000 and $15,000.
Some insurance providers, like Hippo, include coverage against cyberbullying and reputational harm online. Keep in mind that cyber protection policies typically have limits between $10,000 and $15,000. CLICK TO TWEET
What don’t identity theft endorsements provide?
Most homeowners policies cover theft, but provide very little assistance following the theft of someone’s identity. If a thief uses your credit card number to make purchases or withdraws funds from your bank account, you’ll have to handle those losses by contacting each financial institution individually. In most cases, a zero-liability policy will be in place to protect you if your credit card number is stolen. And your bank may refund you for any money that has been taken from your account, depending on how quickly you report the incident.
How to prevent identity theft
Being an identity theft victim is frustrating. Depending on the severity of the damage, the recovery process can take up to several months or even years. That could limit your access to loans and leave you with high interest rates and low credit card limits. You could even have a difficult time getting a job or an apartment. Though you can’t exactly prevent a large-scale data breach, there are steps you can take to protect your personal information from scammers and thieves.
Though you can’t exactly prevent a large-scale data breach, there are steps you can take to protect your personal information from scammers and thieves. Follow these tips to help protect your identity CLICK TO TWEET
- Keep your Social Security card somewhere safe: Never share your Social Security card number or other personal information with any person or company you don’t trust online, over the phone or in person.
- Limit the number of credit cards and forms of ID you keep in your wallet.
- Make it a habit to cover your ATM PIN number as you enter it.
- Keep your computer spyware and antivirus programs up to date.
- Only shop on secure websites.
- Shred important documents and bills before throwing them away.
- Use strong passwords or a password manager to protect your financial accounts.
- Keep an eye on bank and credit card statements to make sure all transactions are accurate.
- Order copies of your credit report from Equifax, Experian and TransUnion every 12 months and review them for errors. You can get them for free at AnnualCreditReport.com.
- Have fraud alerts placed on your credit file so that you’re notified about fraudulent activity.
How to file an identity theft insurance claim
financial institution where your account has been compromised. The faster you can report it, the better. You’ll need a copy of the police report to file your insurance claim. CLICK TO TWEET
If you become a victim of identity theft, you should report the incident to the police and the financial institution where your account has been compromised. The faster you can report it, the better. You’ll need a copy of the police report to file your insurance claim. Alerting your bank or credit card company means that you’ve done what you can to limit your liability.
If your insurance carrier offers restoration services, they’ll connect you to a professional who can replace documents, correct credit reporting errors and address other issues. If that’s not available through your current provider, you’ll have to do everything yourself. If you find yourself in that boat, make sure you hold onto any receipts and documents that prove that unauthorized purchases were made using your personal information.
You may have to pay a deductible before your insurance coverage kicks in. Often, it ranges from $100 to $500. Check your policy and make sure the claim is worth filing before you fill out any paperwork.
Final word
No one wants to be an identity theft victim. But just in case you find yourself dealing with fraud, you’ll want to make sure you have insurance. That means you may have to purchase an endorsement. Most homeowners would agree that identity theft insurance coverage is necessary in case things get serious. Even if it’s not part of your standard homeowners insurance package, you’re better off asking for a rider.
Still have questions about homeowners insurance and identity theft? Contact a Hippo specialist. We’re here to help!
