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While keeping your identity protected is undoubtedly important, deciding whether you should pay for an identity theft protection service might not be as straightforward. You'll want to understand what each service offers—or lacks—to determine if the cost is worth the potential savings and benefits.
What Is Identity Theft?
Identity theft is when someone steals your personal information and uses it for fraudulent purposes. Fraudsters can do this in various ways, from physically going through documents in the trash to hacking into devices. Or, if your personal information is compromised in a large data breach, it may be sold on the dark web.
Fraudsters can also use your information in different ways. Some may try to open credit cards or loans in your name, running up a balance or taking the money and moving on. Or, in the case of medical identity theft, purchasing procedures or medications in your name.
Victims of identity theft may experience:
- Credit damage: Unpaid debts in your name could lead to negative marks being added to your credit history. Fortunately, these can be disputed and fixed if they're the result of fraud.
- Tax bills: Fraudsters may be able to file tax returns in your name and claim tax refunds, or use your personal information to get a job and not pay taxes, leaving an unpaid tax associated with your identity.
- Mistaken medical records: Having someone else's medical information mixed with yours can be difficult to fix and potentially dangerous.
- Criminal records: Additionally, you may have to clear your criminal record if someone used your identity to commit a crime.
While it's possible to recover from identity theft, the process can take a lot of time and money. It can also have repercussions on your quality of life. A 2018 Identity Theft Resource Center survey found that victims of identity theft had trouble sleeping (84.1%); concentrating (63.6%); and most (56.8%) experienced ongoing aches, pains, cramps and stomach issues.
What Is Identity Theft Protection?
Identity theft protection services may offer different benefits depending on the program. Many include credit report monitoring with alerts if there are changes in your reports.
However, identity theft protection should go beyond credit monitoring. For instance, services may also monitor the dark web and various databases, including sex offender registries, court records and payday loan reporting for your personal information.
Additionally, some identity theft protection services come with identity theft insurance. The insurance coverage can help pay for costs related to obtaining, amending and correcting your records, including:
- Notary fees
- Fees for requesting credit and medical reports
- Fees for new identification cards and documents
- Lost wages
- Child or elder care
- Certified public accountant fees
- Legal fees
What Are the Benefits of Identity Theft Protection?
While monitoring services are reactive rather than preventative, an early warning system can help you quickly take action and respond to identity theft. As a result, you may be able to lock down your accounts and information, which can prevent widespread or ongoing problems. Ideally, you can catch the fraud before any damage is done.
For example, you might get an alert that there's a new hard inquiry in your credit report when someone uses your information to apply for a credit card. You can then contact the card issuer and try to shut down the account before the fraudster receives and uses the card.
If your identity is compromised, having support with recovery can ease some of the stress involved. Javelin Strategy and Research's 2019 Identity Fraud Study found that 23% of fraud victims had expenses they were unable to have reimbursed in 2018. With this in mind, a protection program that includes identity theft insurance may provide real monetary benefits as well.
How Do I Get Identity Theft Insurance?
You can get identity theft insurance from different providers. Some sell it as a stand-alone offering, in conjugation with other insurance policies or as part of a broader identity protection service.
Experian offers identity theft insurance with all Experian IdentityWorksSM subscriptions.
Depending on the plan you choose, you may receive up to $500,000 or $1 million in aggregate coverage. In either case, there's no deductible before you receive benefits. However, there are limits for specific types of coverage. For example, lost wage benefits are limited to $1,500 per week for up to five weeks.
The Experian IdentityWorksSM plans also include fraud resolution support, which can help guide you through the recovery process if your identity is stolen. And you can use your account to easily lock and unlock your Experian credit file and monitor your FICO® Scores☉ .
Other Ways to Protect Your Identity
You can also protect your identity by implementing many preventative measures on your own, including:
- Monitor your credit reports (Experian offers free credit monitoring).
- Freeze your credit reports.
- Use strong and unique passwords for your online accounts.
- Be careful about who you share your personal information with, including on social media sites and over the phone.
- Add a lock to your mailbox.
- Shred documents with personal information.
- Don't carry your Social Security card in your wallet.
While there's no foolproof way to keep all your personal information secure, being cautious and taking preventative measures is important.
Is Identity Protection Worth It?
With all the above in mind, you can make an informed decision about whether identity theft protection is worth it for you and your family.
The most basic Experian IdentityWorksSM Plus plan covers one adult, comes with up to $500,000 in identity theft insurance and costs $99.99 per year when billed annually. There are also plans that extend coverage to up to 10 children and/or a second adult, and offer higher limits and more benefits.
Even if you're already taking preventative measures, an identity protection program offers protections you can't put in place on your own. Responding quickly when your information is found on the dark web or in different databases can save you time and money. And having assistance and insurance coverage could make recovering easier and less stressful.