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Identity theft insurance coverage

identity theft insurance coverage

Americans have reported nearly 560,000 cases of identity theft nationwide so far in 2023 according to the Federal Trade Commission. Identity theft victims can be impacted in various ways, including not being able to use their credit cards or obtain a new loan — or, in more severe cases, becoming subject to criminal investigations.

ID theft is one of the fastest-growing crimes in America and it can cost a victim a significant amount of time and money to recover their information and repair their credit. As business increasingly moves toward e-commerce and away from face-to-face transactions, the risk of ID theft will only continue to grow.

What is identity theft?

ID theft occurs when personal information such as Social Security numbers, credit card or bank account information are obtained without permission. Once thieves have this information, they can use existing credit cards or open new ones to make purchases in the victim’s name, write bad checks or take out loans. If the theft is not immediately recognized, a victim’s credit could be tarnished for some time before they realize it.

Insurance coverage

ID theft insurance covers the costs victims incur while they are taking back their identity. The coverage may include:

  • phone call and photocopying charges;
  • postage fees for mailing documents;
  • salary loss due to uncompensated time away from work while repairing one’s identity;
  • legal fees;
  • access to a fraud specialist who can assist in restoring good credit and protecting one’s identity again; and
  • help preparing documents, filing police reports and creating a fraud victim affidavit.

Since victims may spend a considerable amount of time recovering from ID theft, these services can make the situation a little less stressful, both on the mind and the wallet.

ID theft insurance plan next steps

Employers sponsoring an ID theft insurance plan can purchase this coverage for their employees or offer it as an employee-funded option on their regular benefits package. If you’re interested in offering this benefit, contact our team of experts today! We’ll walk you through options and discuss ways to tailor them to your needs.

This Benefits Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. © 2016, 2019, 2023 Zywave, Inc. All rights reserved.

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