Insure Against Identity Theft
While only a handful of carriers offer identity theft insurance, the coverage is poised to move into the mainstream much as long term care insurance did more than a decade ago.
Why? Simply because there is a growing need for it, as both employees and employers find that dealing with identity theft is taking a toll on productivity.
Virtually everyone has seen the statistics. Identity theft has affected 1 out of every 8 adults or a family member. There were 10 million victims in the United States in the last year alone.
Depending on which studies you read, it takes a person from 6 to 24 months and from 150 to 300 hours to recover from a stolen identity. Hours are spent getting and reviewing credit histories, closing accounts, talking to credit card companies work that almost always has to be done during business hours.
The first corporations to offer identity theft insurance were banks. Banks sell coverage that protects customers’ credit and debit cards.
Recently, insurers particularly those offering prepaid legal insurance benefits have been offering identity theft benefits along with other benefits products.
Most employers are asking employees to pay for the identity theft coverage. Typical annual premiums range from $25 to $60, depending on the coverage provided.
Identity theft coverage offers employees access to specialists who can guide them through the process of restoring their identity and credit records. Coverage can be provided for lost wages as a result of time taken off work to cope with a stolen identity, and for out-of-pocket expenses, such as notarized affidavits and long distance phone calls. Some policies will cover defense costs for civil lawsuits, as well as costs of reapplying for loans and paying other fees.
Related coverages may protect against losses from direct physical damage to computers or even damage to software as the result of a computer virus.
Our prediction is that identity theft protection will grow, as today’s computerized society makes the crime far easier than it has been. The first buyers will be companies already offering benefits to help employees cope with personal distractions, such as child care benefits and elder care benefits.
, CEBS, is vice president, employee benefits, at Associated Financial Group, Minnetonka, Minn., and chair of the employee benefits practice group of RiskProNet International, a network of 28 independent U.S. and Canadian insurance brokers.
Reproduced from National Underwriter Edition, April 15, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.