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Thursday, June 7, 2012

Identity theft insurance - just not worth the money



Money Talks News recently published an article about eight types of insurance or other protections that are not worth the money they cost. What did Money Talks list as the number one not worth it protection? Identity Theft Insurance.

Here's what Money Talks said:

"Identity theft insurance doesn’t protect you from becoming a victim of the crime, or sometimes even replace money lost. The insurance only covers some of the expenses you accrue dealing with identity theft – like the cost of mailing letters to your creditors and maybe some legal fees. And it costs $20 to $100 per year – plus a $100 to $1,000 deductible, according to MSNBC.

Instead of paying for extra insurance, see if your credit card company offers identity theft recovery services. Some companies, like American Express, help you free of charge.

If your card doesn’t come with it, you can still protect yourself. The Federal Trade Commission has a list of steps to take if you’ve been victimized by identity theft on their website – like placing a fraud alert on your credit report and canceling affected credit accounts."

What do I think? I think identity theft insurance is not only not worth the cost, its also harmful in a lot of cases. The identity theft insurance policies I have seen often limit the insured's ability to file any type of lawsuit or seek compensation for his or her injuries. Others limit your attorney selection to the attorney hired by the identity theft insurance company, who will probably not be willing to pursue a claim on your behalf.

You are much better off to take the steps that I and others have suggested - i.e. the vigilance and diligence mantra that I espouse ad nauseam - and, if those steps don't work, hire an Fair Credit Reporting Act experienced attorney to file a lawsuit for you.

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