Released: January 23, 2019

Help Desk FAQ

Should I pay for identity theft insurance?

Some insurance companies and other businesses offer consumers protection against identity theft. In some cases, the protection is actual insurance, sold as an add-on to your auto or home insurance or as group coverage through your employer. It also may be a fee or free benefit through a financial institution where you have an account. Or, it could be sold as a stand-alone identity theft protection plan (not “insurance”).

If the protection is free, whether through work or your financial institution, then there’s no decision to be made. If, however, you’re considering purchasing protection, then you’ll have to weigh the benefits of the policy or plan against the cost and the likelihood you’ll file a claim.

Anything that can be done to protect your identity, you can do yourself at little or no cost. However, ID protection plans and insurance policies may offer such things as guidance in dealing with the theft, help with completing and submitting paperwork, and reimbursement for any out-of-pocket costs (for example, legal fees, time off work, postage and long-distance calls). Generally speaking, only the most serious ID theft cases result in high out-of-pocket losses, many hours away from work or the need to hire an attorney.

Cost and benefits vary widely among policies and plans, so if you do decide to purchase identity theft protection, shop around.

Here’s what you can do, free or for a small fee, to protect yourself against identity theft and reduce your financial losses if you do become a victim:

• Monitor your accounts. Review all monthly statements, or check activity even more frequently online, to catch any suspicious activity.
• Keep track of your cards and report a lost or stolen card immediately. Your liability for unauthorized use of your credit cards is $50. Your liability for unauthorized use of your ATM or debit card is $0 if you report the loss or theft before the card is used, and $50 if you report it within two business days of when you notice the card missing. (It goes up from there.)
• Request your credit report from each of the three major credit reporting agencies (Equifax, Experian and TransUnion) free every 12 months at the Annual Credit Report website or by calling 877-322-8228. By staggering your requests—one every four months—you can monitor your reports throughout the year at no cost.
• If you think you’re at an increased risk, place a fraud alert with the three major credit bureaus, warning lenders to take extra precautions to verify your identity before granting credit in your name. Contact any one of the three credit bureaus (Equifax, Experian, TransUnion), which will notify the others. A fraud alert entitles you to an additional free credit report.
• Request that your name be removed from lists for pre-approved credit card offers (so they can’t be stolen from your mailbox) free at the OptOutPrescreen.com.