Article updated February 18, 2024
Done any online shopping lately? More people than ever are buying stuff online — everything from clothing, shoes, groceries and medicines to expensive furniture, hardware and tools, and even cars. It’s convenient, product variety and selection are improving all the time, and it’s only getting easier to shop online.
But this convenience has its risks. Identity theft, in which someone wrongfully obtains and uses another person’s personal data in a fraudulent manner, continues to rise each year. Vigilance is key to avoid becoming a victim, along with taking steps to boost your online security (see these tips). Adding identity theft coverage to your homeowner or renter insurance policy is another important tool in the anti-fraud toolkit. It provides helpful recovery assistance and an effective layer of financial protection.
As online shopping increases, so does identity theft
As of early 2023, a total of 43% of Americans indicated that they prefer online shopping to in-person shopping, according to data from Statista. Studies show that online shopping is increasing each year, and is projected to grow from an expected 20.8% of total retail purchases in 2023 to nearly a quarter of all purchases (24%) by 2026. With all this online shopping going on, the risk of falling prey to an identity theft scam is rising.
You’ve probably heard this a thousand times: It’s important to remain vigilant when shopping online. It bears repeating because, according to the Federal Trade Commission, online shopping scams are near the top of the list for consumer fraud reported, contributing significantly to the billions of dollars lost by consumers each year.
According to the FDIC, top scams involve tricking people into providing financial and personal information through various ways, including the following missteps:
- Visiting fake websites and installing fake apps
- Clicking links in unsolicited emails from unknown people or organizations or people posing as known entities (learn more about phishing)
- Making payments on unsecure websites (make sure the website address contains “https” instead of “http”)
- Using public wifi for online shopping
- Falling for package-delivery scams
How identity theft coverage helps
Identity theft coverage is designed to assist individuals in recovering from the financial and legal consequences of identity theft. Identity theft insurance can range from $25 to $50 per year for $15,000 to $25,000 of coverage, depending on the company and types of coverage offered. Adding an inexpensive identity theft rider (additional coverage) to your homeowner or renter insurance policy is a smart strategy to ensure you will recover from an identity theft incident with minimal or no financial loss or reputation damage.
Coverage can include the following services:
Financial reimbursement. If someone steals your identity and misuses your personal information, such as credit card numbers, Social Security number, or other sensitive data, identity theft insurance can cover the expenses incurred due to fraudulent activity. This may include reimbursing you for unauthorized charges, legal fees, and the costs associated with restoring your identity. It also covers unauthorized charges made on your accounts, including credit cards, bank accounts and loans.
Identity restoration services. You can receive assistance in the recovery process by working with one or more experts who can provide resources to help guide you through the process of restoring your identity and help repair damage to your credit. They can assist in contacting credit bureaus, reporting the theft to relevant authorities, dealing with creditors, and providing advice on steps to take to mitigate the damage.
Legal support. Coverage may include legal assistance to help navigate complex legal procedures or disputes that arise from identity theft.
Credit monitoring and alerts. Some insurance plans include credit monitoring services that help you keep track of any suspicious activity on your credit report. They can alert you to potential signs of identity theft early, allowing you to act promptly.
Coverage for lost wages. In cases where identity theft has caused you to miss work or take time off to resolve issues related to the theft, some policies may cover lost wages during that period.
Expense reimbursement. Your policy may cover expenses incurred in the process of restoring your identity — such as notary fees, mailing costs and obtaining credit reports.
To do: Get identity theft coverage and remain vigilant
Identity theft insurance provides valuable support in the aftermath of identity theft and can help you regain your financial footing. It’s important to understand the coverage limits, specific services offered, and any exclusions in the policy. Call your Bradish agent to find the right coverage for your needs.
In addition to getting identity theft coverage, it’s essential to regularly monitor your accounts, take precautions to protect your personal information, and be proactive in detecting and reporting any signs of identity theft. Being vigilant and taking proactive steps such as using strong passwords, monitoring accounts regularly, and being cautious with sharing personal details online can go a long way toward preventing identity theft. Stay safe out there!
by Kris A. Mainellis
