Identity Theft and Your Homeowners Insurance

ID Theft


As many as a million Americans may have been affected by identity theft during the last year alone, according to the federal trade commission.  Identity theft is when someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain or to commit crimes(s).  These crimes include stolen credit card numbers, bank account information used for the financial gain of the criminal.  Loans can be obtained falsely, properties purchased and bankruptcy filed all under another person’s name.  On occasions crimes are committed, warrants for arrests issued under another person’s name.  Illegal aliens use false social security numbers to obtainwork, establish credit, buy a home, pay taxes, usually using their own names but with another’s social security number.


What steps can be taken to reduce an event of identity theft.  Review your financial information at least annually, including running your credit report, credit card statements, and bank statements.  Keep your personal data on a need to know basis.  Only provide this information to trusted sources and vendors.  Destroy documents that contain personal information before it is thrown in the trash, including all junk mail, and credit card offers.  When travelling, have a trusted neighbor retrieve your mail each day while your away.  Be careful when you are on the phone especially when giving away personal information.  Pay attention to who is standing with in ear shot, and to whom you are speaking.  Run a full background check on yourself at least annually.  Hire a private investigation service to run a standard “pre-employment” check on yourself.  This type of service shouldn’t cost too much.


Most homeowner insurance companies will now offer FOR ADDITIONAL PREMIUM the option to add identity theft coverage.  The most important part to remember about this coverage is that it will NOT pay for lost funds or stolen monies from accounts or charged through those accounts.  The coverage is designed to pay for reasonable and necessary expenses that are incurred as a direct result of an identity theft.  Examples could include costs for re-filing applications for loans, attorney fees, and document reconstruction, time off work, and additional day care expenses.  There is no coverage for a business or professional entity and it’s identity.  There is no coverage for an act of an insured to another insured.  What this means is a spouse who still lives at home in the process of a divorce gets money from an account, or racks up huge credit card debt and “sticking it” to the spouse.  There would be no coverage for a grandchild living with a grandparent and uses the grandparents information for financial gain.  The claim is triggered when the theft of id is DISCOVERED, this becomes the date of loss and it is the policy at that time that will respond.  The theft must be reported to the insurance company within 60 days after the theft has been discovered.


At the time I wrote this article, I received an e-mail from what appeared to be my credit card company stating that I had been “locked out” from logging on their web site because the wrong password had been used.  I called the credit card company and they told me that the e-mail was a scam.  The e-mail that was sent to me looked very authentic, including the credit card company logo.  I will be checking my next few credit card statements for unauthroized charges.  For more information on the insurance coverages available please contact our office.



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