identity theft insurance questions

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what is the most cost effective/practical way to get identity theft insurance. I noticed some credit cards I own offering id theft protection or resolution services?  Anyone have an idea on using this and if it is limited to transactions related to that card vs home owners policy, renters policy, or other insurance that protectes me or my household (card holders or named insured) from identifty theft expenses/losses  Sorry if this is not the right thread

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Considering that you are not responsible for unauthorized charges and that most likely you will have to clean up the mess yourself without incurring any actual expenses, what exactly do you expect ID theft insurance to pay you for?

ID theft insurance is modern snake oil as far as I'm concerned. You just need to know what to do when ID theft occurs. Here's a list I just threw together; perhaps we can make a more complete list and make it a permanent feature somewhere on FWF:

0) Watch your accounts and dispute any unauthorized transactions.
1) Report ID theft to the local police department and record the report number (or get the full report if you can).
2) Place a Security Freeze on all credit reports and public data aggregators (free with the police report): Experian, Equifax, TransUnion, Innovis, ARS, IDA, LexisNexis (Krebs article, Clark Howard guide).
3) Get your credit reports (free once a year) and start monitoring your credit (free at freecreditscore, creditkarma, quizzle, creditsesame, etc). Verify that your reports are correct, dispute anything that isn't.
4) Notify ChexSystems (may require the police report), get the report (free once a year), verify it.
5) Get a PIN for filing taxes with IRS (Krebs article). Make a habit of filing as early as possible, just in case.
6) Disable online access or get a PIN for accessing your SSA data online (Krebs article).
7) Report ID Theft to the FTC at identitytheft.gov. There's more info and similar steps described with more detail.

All of these except #1, #7, and the first part of #4 can be done as a precaution even before theft occurs.
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Self-insurance is probably the most cost effective and practical option for any insurance. You buy insurance from someone else for events that you couldn't self-insure - car crash with injuries, house destruction, cancer.

I'm not sure what the potential losses are for 'identity theft', but aren't they mostly lots of time to sort things out?

As far as I know , there is no 'id theft insurance' that covers all forms.

I mean 'lifelock' has a claim of it, but do they really follow through?

Unless you are applying for credit every week or two, freeze your credit reports and unlock them when you need them.  Even if you have to pay to unlock them (it's free in several states now but worst case costs $10 per temporary unlock), its still MUCH less then you'll spend on any monthly insurance policy fee.  I've had mine locked for about 8 years now, I thaw them when I need to apply for something and they relock a day or two later automatically.  It's not a big deal and helps to act as a cooling off period since I can't impulse buy big ticket items that can't fit on my credit cards (like a new car).

All you're going to get from an insurance policy like Lifelock is a promise to help you clean up the mess after it's happened.  It's closing the barn door after the horse has run away.  Even if Lifelock or whoever drops everything and helps just you and not the other thousands of people who are also having ID theft problems, it could take months if not longer to clean up the mess.

I've been subject to 5 or 6 data breaches (Anthem, OPM, State Tax Return hack, etc) in the last few years where I know my SSN, address and all the personal information that IDs me as me has gotten out into the wild and it's not like its getting any safer.  But, I don't care, credit reports are all locked (Big 3, Chex, Clue, and a few of the smaller ones), no one is going to get any new credit in my name unless I allow it.  In fact the only time I worry about my credit reports is the one or two times a year I unlock them, and then only because in that small window where someone other then who I want would be able to pull my credit (Yes, I know I can unlock for a specific party, but that's hit or miss given I might not know the actual name of the finance institution when they pull it).  Luckily because of all the breaches, I've got free credit monitoring for the next 5 or 6 years  so anytime I do unlock them, I can watch to make sure someone else doesn't slip in.

Considering that you are not responsible for unauthorized charges and that most likely you will have to clean up the mess yourself without incurring any actual expenses, what exactly do you expect ID theft insurance to pay you for?

ID theft insurance is modern snake oil as far as I'm concerned. You just need to know what to do when ID theft occurs. Here's a list I just threw together; perhaps we can make a more complete list and make it a permanent feature somewhere on FWF:

0) Watch your accounts and dispute any unauthorized transactions.
1) Report ID theft to the local police department and record the report number (or get the full report if you can).
2) Place a Security Freeze on all credit reports and public data aggregators (free with the police report): Experian, Equifax, TransUnion, Innovis, ARS, IDALexisNexis (Krebs articleClark Howard guide).
3) Get your credit reports (free once a year) and start monitoring your credit (free at freecreditscore, creditkarma, quizzle, creditsesame, etc). Verify that your reports are correct, dispute anything that isn't.
4) Notify ChexSystems (may require the police report), get the report (free once a year), verify it.
5) Get a PIN for filing taxes with IRS (Krebs article). Make a habit of filing as early as possible, just in case.
6) Disable online access or get a PIN for accessing your SSA data online (Krebs article).
7) Report ID Theft to the FTC at identitytheft.gov. There's more info and similar steps described with more detail.

All of these except #1, #7, and the first part of #4 can be done as a precaution even before theft occurs.

thanks I understand your thoughts. So would you not have it on your owners or rental policy even if it is just @20 or some relatively small amount (I forget to be honest but less than the services you pay monthly for) per year because it is not worth it for the reasons above and it is on some credit card?

Correct.

I rely on the UCC, Reg E, and Reg Z to protect me from taking a financial loss, and I'll deal with the clean up when it happens. I'm pretty sure the insurance won't pay my hourly rate for the work I do anyway.

scripta said:   5) Get a PIN for filing taxes with IRS (Krebs article ). Make a habit of filing as early as possible, just in case.

Or better yet, just make sure you owe money as in don't make interest free loans so that you can file at the last minute if you're so inclined.

Chyvan said:   scripta said:   5) Get a PIN for filing taxes with IRS (Krebs article). Make a habit of filing as early as possible, just in case.Or better yet, just make sure you owe money as in don't make interest free loans so that you can file at the last minute if you're so inclined.First, owing money does not prevent a fraudulent tax return being filed on your behalf. Second, while it's a good idea in general, there may be a penalty if you owe too much.

scripta said:   First, owing money does not prevent a fraudulent tax return being filed on your behalf. Second, while it's a good idea in general, there may be a penalty if you owe too much.

You'd have to explain the first part because it's not making sense to me. I don't care if someone files a fraudulent tax return. I'd only care if they got my refund, and then I was put in the awkward position of having to beg for my money. If I owe, I'm sending in a check for the difference, and I don't care that the IRS/Dept of Revenue sent off their money to someone else. That's their problem.

As to the second, the penalty is not that much, and I can do basic math to make sure it's not a problem.

If you want to file your taxes early to get your refund, that's fine. I think my alternative is better.

Kind of like last night's news where the reporter was going through a list of ways to protect yourself from gift card fraud after someone's $1,200 in Target cards were drained, and ignored the obvious: just give cash or a check. Doesn't expire and you can use it anywhere.


  

Chyvan said:   scripta said:   First, owing money does not prevent a fraudulent tax return being filed on your behalf. Second, while it's a good idea in general, there may be a penalty if you owe too much.You'd have to explain the first part because it's not making sense to me. I don't care if someone files a fraudulent tax return. I'd only care if they got my refund, and then I was put in the awkward position of having to beg for my money. If I owe, I'm sending in a check for the difference, and I don't care that the IRS/Dept of Revenue sent off their money to someone else. That's their problem. I agreed that it's a good idea to owe money. But I'm guessing that it'll be a problem either way, requiring the same steps and time to fix. The only difference is you won't have to wait for a refund, since you're not owed one. Filing early may thwart a fraudulent return.



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