Are you talking to policyholders about ID theft endorsements?
Among victims of ID theft in the past 12 months, 46% said they would have liked more assistance in handling the problem but didn’t get it, according to the Identity Theft Resource Center.
During the past 12 months, around 40% of Americans surveyed by the Identity Theft Resource Center (ITRC) had their identity or personal information stolen, compromised or misused. Further, ITRC reports that Q3 2022 saw a 15% increase compared with the previous quarter.
Among victims of ID theft in the past 12 months, 46% said they would have liked more assistance in handling the problem but didn’t get it, ITRC reports. One way they could have accessed this additional help is with an identity theft endorsement on a home or renters policy.
An ID theft endorsement should not be confused with personal cyber insurance, as they are each designed to cover different exposures, according to Patricia Riederer, property product analyst with American Family Insurance.
Personal cyber provides coverage when a policyholder is the victim of cyber extortion, online fraud, or a computer, home system or data breach, Riederer says. ID theft endorsements help policyholders recover by providing money for expenses associated with re-establishing damaged credit, such as fees for legal services and loan reapplications, lost wages and notary expenses.
“Personal cyber insurance typically covers costs to hire a professional to reinstall your computer’s operating system and restore backed-up data,” she tells PropertyCasualty360.com. “ID theft insurance provides coverage when someone wrongfully obtains and uses your personal information to commit fraud.”
An ID theft endorsement, however, does not cover fraudulent charges made in the victim’s name, including credit card purchases or loans. The Insurance Information Institute reports that most credit card companies will only hold victims of identity theft liable for a stated amount of fraudulent charges once the incident is reported. Further, home and renters policies might provide a limited amount of coverage for the loss of cash or credit cards.
In addition to helping cover expenses, ID theft endorsements can include third-party identity fraud resolution services, Riederer says, explaining: “With this service, our customers have a dedicated fraud specialist assigned to work with third parties such as law enforcement, credit bureaus and collection agencies.”
ID theft coverage is also an affordable way for policyholders to gain protection against a growing threat; American Family’s ID theft coverage can cost less than $30 annually for $25,000 in coverage, according to Riederer.
Avoid becoming a victim
While adding an ID theft endorsement to a home or renters insurance policy can help cover the fees and hassle associated with identity theft, the endgame should always be not becoming a victim. To this end, the Insurance Information Institute offers these tips to prevent identity theft:
- Keep the amount of personal information in your wallet to a bare minimum.
- Guard you credit card when making purchases.
- Always take credit card or ATM receipts.
- Don’t give out personal information.
- Be cautious when shopping online.
- Be watchful for phishing and similar social engineering scams.
- Keep your computer security up to date.
- Monitor your credit card and bank accounts.
- Review your credit report annually for errors.
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