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IDENTITY THEFT INFO > PROTECT Yourself > Know What You’re Buying - The Five Golden Rules For Buying Identity Theft Protection Products

Know What You’re Buying - The Five Golden Rules For Buying Identity Theft Protection Products

So you’ve decided to pay a few dollars each month for some peace of mind in the event you become a victim of identity theft. 

You’ve decided to buy some sort of protection for yourself or perhaps your entire family.  It may be insurance coverage, it may be a credit protection product, or some combination of both.

Smart thinking.  Now, how do you choose the right product?

BUNK ALERT: All Identity Theft Prevention/Protection Products are NOT created equal. 

Choosing the right protection product can be tricky.  Some products available out there are excellent – offering sound financial protection with solid benefits.  We happen to think that Stolen Identity Coverage is one of those options.  While Stolen Identity Coverage is not an insurance plan, it does offer an impressive range of identity fraud resolution benefits.

Unfortunately, in today’s marketplace, many other options are … well, let’s just say less than great.  Much of the coverage offered as part of credit protection services provides you with big promises and million-dollar guarantees in the event that your identity is stolen (such as TrustedID, LifeLock, LoudSiren, and other similar services). 

But just when you think you’re safely protected, you may still be at risk.  What you’ll likely discover if your identity is stolen is a complex maze of limitations, exclusions, and loopholes.

So how do you know if what are you’re buying is really good protection? Here are 5 rules to help you decide.

Rule #1:  Don’t overpay.

Identity Theft Protection products typically cost somewhere in the range of $12 to $18 a month, and can be purchased as an insurance rider to a basic homeowner’s policy or as a stand-alone policy or non-insurance product from another company. If you’re paying more than this, you should consider shopping around.  If you’re paying less – make sure you’re reading the fine print.  It’s quite possible that something important isn’t covered.  Which leads us to…

Rule #2:  Know what expenses are covered.

Identity theft protection products typically cover some or all of the expenses you will incur in dealing with your situation, such as the costs of making phone calls and copies, mailing documents and possibly legal bills.  However, some products don’t cover legal fees at all.  Some won’t cover your lost wages or time away from work. And when it comes to the complex and time-consuming job of recovering your identity, some will leave you high and dry.

Given that the average victim spends over $1,100 of their own money and over 175 hours (5 full work weeks) restoring their identity, you’ll want to be sure that your coverage includes benefits to cover your time and expenses.

Rule #3:  That clock is ticking!

Some identity theft protection and restoration products require that you report identity theft within a certain timeframe.  That timeframe can be surprisingly short, often 30 days.  Depending on how frequently you monitor your credit reports, your 30 days can slip away quickly.  By the time you take action… you may be out of luck.  Be aware.

Rule #4:  What’s the deductible?

Make sure you can live with the deductible (or, in common language – the amount you’ll have to pay out of your own pocket before your coverage starts paying for you).  It can be as high as $1,000 or more.  We have to wonder: why would you pay a monthly fee, only to end up paying for everything yourself? 

Rule #5:  Don’t believe everything you read.

A $1,000,000 guarantee sounds great.  But trust us, you won’t likely ever collect a million dollars.  It’s a marketing offer.  And if you think you’ll get a million bucks when and if your identity is stolen, you could be in for a big (read: unpleasant) surprise.

Read the fine print.  Usually, what you’ll find behind the million- dollar guarantees are a lot of circumstances that won’t ever happen to you (or, at the very least, are highly unlikely to happen).  Our recommendation:  when it comes to ID theft protection, read everything with a skeptical eye.

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Why Stolen Identity Coverage May Be Your Best Bet

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Paying for ID Theft Protection Is Not Necessary