(KKTV) - It’s no secret that identity theft has become a huge problem.
One person told us, “I’m constantly changing my passwords.”
A second said, “Nothing’s secure in this world right now.”
And another told us, “I’ve had a business checking account drained.”
A fourth said, “I have to give that security code of my credit cards and that worries me a little bit.”
Some companies are looking to cash in on consumer anxiety, by offering identity theft insurance.
For $25 to $50 a year companies like Allstate, Liberty Mutual and State Farm, offer it as an add-on to your home or rental insurance. In most cases, they’ll reimburse you up to 25 thousand dollars for covered losses.
Lauren Lyons Cole, Consumer Reports’ Money Editor explained, “That sounds pretty good but most banks and credit card companies already cover you for losses due to fraud. And most victims actually suffer very little or no out of pocket losses.”
So what does ID theft insurance actually get you? Typically, coverage includes assistance in dealing with the aftermath of identity theft, which can be time consuming - like covering out of pocket expenses, or supplying a case manager to make calls on your behalf.
Cole says, “But this insurance isn’t designed to alert you to identity theft. That’s what identity protection services do. It’s really there for what happens after you’ve been compromised.”
Consumer Reports says taking matters into your own hands can be more effective and cheaper, which can include freezing your credit report and signing up for free online apps to monitor your checking and credit accounts daily.
If you do opt to purchase insurance, Consumer Reports says make sure you look closely at what you are getting and what you’re paying for.