Why Identity Theft Insurance is an Absolute Necessity Today

A recent study found that almost 10 million Americans became prey to identity theft in 2005 and since this is the fastest growing crime, these numbers can only be more this year. In many cases, the identity thieves were able to obtain loans, credit cards, open bank accounts online and even secure mortgages and not be concerned about defaulting because after the all, someone else would be the fall guy. A sad factor with ID theft is that a great majority of people cannot trace how their identity was compromised in the first place.

The ID bandits impersonate the victim and use that impersonation to steal banking information, social security numbers, credit information and even retirement. Many also use this information to steal other information causing a spiral that can be extremely hard to track. It is also sad that the burden is on the victim to prove that they are who they say they are.

The most popular and easiest form of identity theft is that one involving debit and credit cards. Thieves use ingenious methods to obtain credit card and/or debit card information from unsuspecting people and use these numbers to go on online shopping sprees. The first thing they attempt to do is access the victim’s bank account and change the victim’s address.

Because of the distress caused by ID theft, a new product is being peddled by insurance companies and banks and that is-identity theft insurance. There are now several ID theft insurance packages to choose from. Some companies such as mortgage companies, auto loan companies and even banks provide this insurance at no cost. Banks may charge a small fee such as $9.99 which they bundle with other services such as credit monitoring.

This type of insurance protects the owner against the damage caused by identity theft and banks even promise to reimburse the victim of all their loses within 48-72 hours of the incident. Loses accruing from identity theft include phone bills emanating from trying to correct the situation and even the actual monetary loss.