Identity Theft Insurance?

Identity theft and cybersecurity are topics we have touched on frequently over the past year, but bear with us as we go to that well one more time.  In the wake of the Equifax breach this topic has been everywhere, but it leaves us with important questions; can we fix the system, and how do we protect ourselves?

This past week the White House’s cybersecurity coordinator Rob Joyce called for the use of Social Security numbers as an identification code to end.  Joyce went on to say, “Every time we use the Social Security number, you put it at risk.” “It’s a flawed system that we can’t roll back that risk after we know we’ve had a compromise,”. “I personally know my Social Security number has been compromised at least four times in my lifetime. That’s just untenable.”  The difficult part is that with Social Security numbers so imbedded into our society any change to that system would likely take laws and congressional action. Such a systemic change would take years if not decades to thoroughly vet and implement.  With those obstacles it's safe to assume that the process of using Social Security numbers as personally identifiable information isn’t going away anytime soon.  So, if that’s the case, how do we protect ourselves? 

Well, the main way people think of right now is through credit monitoring from services like TrustedID and Life Lock.  There is also the option to freeze your credit, but can often be a hassle.  Another option that people don’t often know of is Identity theft insurance.  Identity theft insurance is typically a rider offered on major insurance policies like homeowner’s insurance and costs roughly $25 to $50 a year for coverage from $10,000 to a $1 million.  These policies often not only cover damages but can also help you figure out how to fix the issues that identity theft can cause. Unfortunately, for most people identity theft insurance likely isn’t worth it.  According to the Department of Justice 88% of identity theft victims had no losses, and for those who did the median sum was only $70.  So, in the event you we’re a victim of identity theft, you likely wouldn’t have losses over the cost of the insurance premium.  Where these policies can really shine is the assistance they can provide in getting your life back on track. 

So where does that leave us?  Unfortunately, in just as nebulous of a place as we were before, but, with the world becoming increasingly dependent (if not solely) on cloud based data storage this isn’t an issue that is going away any time soon. So, for now, the best course of action is to be vigilant; keep your personally identifiable information safe, monitor your credit reports and existing credit cards.