Identity Theft Coverage Homeowners Endorsement: What’s Covered?

Jul 20, 2021 | Personal Insurance

In the United States, incidences of identity theft have been fast-growing. The chance of having your identity stolen is pretty significant, given our increased reliance on technology. In reality, one out of every fifteen Americans has been a victim of identity theft and fraud. Nowadays, it is practical to secure yourself with identity theft protection coverage. You can get the identity theft coverage by adding it to your homeowners’ insurance endorsement.

What is Identity Theft Insurance?

Identity theft is the process of stealing someone’s personal information to commit fraud. Identity theft insurance coverage provides financial support for victims of identity theft. This insurance coverage may alleviate the financial impact of identity theft. It covers the restoration and credit repair process resulting from identity theft. 

What does Identity Theft Insurance Covers?

Identity theft coverage does not reimburse the financial losses caused by identity fraud. This coverage only covers the financial burden of identity restoration and credit repair. Coverage and limit may vary according to the insurance provider.

 Identity Insurance Theft Covers:

  • Legal Costs
  • Notary Fees
  • Lost Wages
  • Notification Expenses
  • Good Faith Advertising
  • Credit Monitoring Services
  • Travel Reimbursement
  • Postage Fees
  • Service charges for government and financial institution
  • Identity and credit repair fees
  • Childcare costs

How to Get an Identity Theft Coverage

There are various ways to get identity theft insurance coverage. Identity theft endorsement is typically offered along with homeowner’s coverage. You can also get it through your renter’s insurance or get a stand-alone insurance policy.

Cost of Identity Theft Insurance Coverage

The cost of identity theft coverage is quite affordable. The additional cost of getting identity theft insurance ranges from $25-$60. Costs vary depending on the limit of coverage and the insurance company.

Insurance providers that Offer Identity Theft Coverage

Most insurance companies that provide identity theft protection offer coverage limits up to $25,000. Insurer partners that typically carry identity theft insurance products or services:

  • The Hartford
  • Liberty Manual
  • Nationwide
  • Travelers

What to Consider in Choosing Identity Theft Policy

In choosing any type of insurance coverage, always aim to get the best value for your money. Consider the following factors in choosing the best identity theft protection provider.

  • Policy Limits
  • Deductibles
  • Coverage

Consequences of Identity Theft

Identity theft may cause some serious consequences. Fraudsters use personal information to do the following:

  • Withdraw money in your bank and investment accounts
  • Take out loans under your name
  • Enroll in credit cards using your personal information
  • Steal your tax refund 
  • Use your health insurance
  • Act under your name and conduct fraudulent activities

The Need for Tax Audit Defense

Identity theft and fraud can cause you a lot of trouble including tax problems. This may lead to a federal state or IRS audit. Once it happens, you may need to get a tax audit legal defense to help you resolve it.  

How to Protect your Identity

In this modern time, thieves do not only steal your belongings but your identity as well. It is important to be diligent in sharing your personal information. No amount of identity theft coverage can prevent your identity from being stolen. It takes a lot of precautions and diligence to safeguard your identity.

How to Protect your Personal Information:

  • Avoid sharing your personal information with other people. Be extra careful in sharing details like:
    • Full Names
    • Addresses
    • Birthdate 
    • Bank Account Numbers
    • Credit Card Numbers
    • Insurance Policy Details
    • Social Security Numbers
  • Protect your personal records and documents. Shred documents containing your private information before disposal. Destroy expired debit and credit cards.
  • Never leave paper trails. Secure all transaction receipts from ATMs, gas stations, and shops. Destroy or shred receipts before disposal.
  • Secure personal documents in a home safe. There are instances where you get some services done in your home or employ outside help. Home safes keep your documents safe from other people. Ensure these personal documents are safe and secured.
    • Annual Tax Returns
    • Birth Certificates
    • Passports
    • Social Security Cards
    • Credit Reports
    • Will and Testaments
  • Bring only necessary cards when going out. Limit the number of identification and bank cards in your wallet. Do not bring social security cards if not needed.
  • When paying, maintain a close eye on your credit card. This will prevent credit card skimming. 
  • Keep your mailbox safe. You can ensure the safety of your mails by:
    • Suspending mail deliveries when you’re going out of town.
    • Do not avail pre-approved credit cards sent through mail delivery.
    • Avail the U.S. Postal Service-approved lockable mailbox.
    • Sign up for USPS informed delivery.
    • Opt for electronic bank statements.
  • Protect all your electronic devices. Put passwords on all your devices. Don’t share or reveal your passwords to other people.
  • Use a unique password or PIN combination. Do not use birth dates, names, addresses, or telephone numbers as your passwords.
  • Use different passwords for every account. It is advisable to use a different password per account. Store data of passwords in a secured password manager.
  • Enable notification alerts. Banks often send email or text notifications every time you make a transaction. This will help you identify unauthorized transactions.
  • Beware of phishing emails. A phishing email is one of the top tactics cybercriminals use to gather other people’s information. Scammers often send fake emails like email notifications from financial and government institutions. Always verify if the email comes from a trusted source.
  • Avoid sharing your personal information over the phone. Always verify who you are dealing with. If the call seems legit, contact the institution or company. Verify the call before disclosing personal details. Scammers pose as representatives from banks and government agencies. This is how they obtain personal data from other people. 
  • Routinely check your credit reports for suspicious accounts and addresses under your name. Taking advantage of the yearly free credit reports from www.annualcreditreport.com can help prevent credit fraud. This is a government-approved website where you can avail a free credit report. It gives credit reports from the three major credit bureaus Equifax, TransUnion, and Experian. As of today, you can avail of this free credit report weekly until April 20, 2022. 
  • Check all medical and financial statements. Make it a habit to read and recognize all transactions reported. 
  • Take note of your payment due dates. Call and follow-up for delayed payment bills.
  • Restrict access to your credit report by freezing your credit. Lenders evaluate borrower’s financial footing through their credit reports. Without credit reports, the chances of a loan getting approved are next to impossible. Freezing your credit prevents thieves from opening credit accounts under your name. Freezing and unfreezing credit is easy and free.

How to Manage Identity Theft

The risk of getting your identity stolen is rapidly increasing every day. Restoring your identity is a must. Identity fraud is a serious crime. You can be held personally responsible for any fraudulent crime committed under your name. 

  1. Detection and Damage Control 

The longer you repair identity theft, the more damage it can cause. Early identity theft detection helps in controlling damage and recovery. 

Signs of Identity Theft 

Recognizing the warning signs of possible identity theft helps in controlling further damage. 

  • Surprising changes in credit scores
  • Unauthorized opening of new credit account
  • Unrecognizable debt collection notices or court judgment
  • Your children receiving credit card offers
  • Unrecognizable IRS notices
  • Unexplained insurance claims or payments
  • Unauthorized bank transactions
  • Unexplained results in background checks or police reports
  1. Notification of Affected Financial Institutions

It is important to act fast and immediately notify your bank and creditors. Liability policies and protections depend on the type of account you have. 

  • Credit cards

Most banks follow zero liability policies when it comes to identity theft. The Fair Credit Billing Act provides credit cardholders protection against credit card fraud. However, the protection is only minimal as it only provides a maximum liability of $50 per unauthorized charge.

  • ATM/Debit Cards

ATM/Debit Cards and electronic transfers are under the Electronic Fund Transfer Act. Cardholders who reported stolen or lost ATM/Debit cards are not responsible for any transactions made after the report. 

  1. Request Fraud Alert from Credit Reporting Agencies

Request a fraud alert to any of the three major credit reporting agencies. Filing of fraud alerts is free and will last up to a year. This will prevent fraudsters from doing fraudulent activities under your name. 

  1. Credit Reports Evaluation

After placing fraud alerts, credit reporting agencies will give you free access to your credit report. Evaluate your credit reports and look for signs of fraud. Check for unauthorized newly opened accounts, unrecognizable payment history, and personal information.

  1. Credit Freeze

Aside from filing fraud alerts on your credit report, it is also recommended to freeze your credit. This will prevent fraudsters from opening new credit accounts under your name. 

  1. Identity Theft Reporting to Federal Trade Commission (FTC)

To secure proof of stolen identity, consumers can report identity theft to the FTC. You can report it online through reportfraud.ft.gov. You can also report it by calling their hotline at 1-877-382-4357. 

  1. Filing of Police Report

After securing an Identity Theft Report from FTC, file a police report in your local police department. The police report will protect you from further liabilities associated with identity theft. The police report must contain all accounts affected by fraud. Provide all necessary documents including the Identity Theft Report to support the incident. Secure a copy of the police report and investigator’s contact number for future reference.

  1. Removal of Fraudulent Information in Credit Report

People who suffer from identity theft can experience difficulties in applying for new credit cards and loans. File a request from the credit reporting agencies to remove the fraudulent information, if there’s any. Start by submitting a letter of request to remove fraudulent information. Include supporting documents like details of the fraud, identity theft, and police report.

  1. Change in Account Passwords

To prevent further damage, change all account passwords compromised by the fraud. Using strong and unique passwords helps in preventing fraudsters from taking over your accounts. Passwords must contain assorted alphanumeric combinations. Do not use straightforward facts like birthdates and names. Avoid duplication of passwords for different accounts. 

  1. Replacement of Stolen Identification Cards and Documents

Restoration of identity involves replacing documents and identification cards. Request replacement of the stolen identification card from the designated institution. 

  • Social Security

Apply for a replacement of your social security card online. Social security theft must be reported to the Office of the Inspector General. Create an online account and get a copy of your Personal Earnings and Benefits Statement to check for fraudulent activities.

  • Driver’s License

You can report and request a replacement through your local Department of Motor Vehicles for stolen driver’s licenses. 

  • Passport

Report stolen or lost passports to the State Department. You can report it by submitting DS-64 online or by mail. You can also report it by calling 877-487-2778. To replace a passport, make an appointment in a regional passport agency or local passport acceptance facility. 

  1. Contact your Telephone and Utility Provider

You must also alert your telephone and utility provider to prevent thieves from opening a new account using your name. Thieves can use your utility bills to open a new account under your name. If the thief already opened a new account under your name, provide the necessary proof of identity and request closure of the account.

How to Resolve a Credit Freeze

Resolving a credit freeze is very easy. Credit reporting agencies provide a PIN code upon activation of the credit freeze. You can immediately lift the credit freeze upon entering the PIN code. You can also call their hotlines or send an email and provide personal details needed to remove your credit freeze.

In these modern times where identity thieves are getting smarter, it is important to be extra cautious of your surroundings. With the advancement of digital technologies, more and more people are becoming victims of identity theft. Recovering a stolen identity is a long, stressful and expensive process. One day, you might just wake up and realize you’re 1 of the 15 people who became a victim of identity fraud. Invest in identity theft coverage now. Purchasing one can save you from the costly process of recovering your identity.

Advantage Insurance Solutions offers homeowner’s insurance coverage with identity theft protection. Call us today and our knowledgeable agents can help you choose the suitable coverage for you.