What's the Deal: Is identity theft insurance worth it?

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In 2015 alone, $15 billion dollars was stolen from 13.1 million Americans, but before you get ID theft insurance, listen up. (WPVI)

In 2015 alone, $15 billion dollars was stolen from 13.1 million Americans, but before you get ID theft insurance, listen up.

It's no secret that identity theft has become a huge problem.

Some companies are looking to cash in on consumer anxiety by offering identity theft insurance.

For $25 to $50 dollars a year companies like Allstate, Liberty Mutual and State Farm, offer it as an add-on to your home or rental insurance. In most cases, they'll reimburse you up to $25 thousand dollars for covered losses.

"That sounds pretty good but most banks and credit card companies already cover you for losses due to fraud. And most victims actually suffer very little or no out of pocket losses," said Lauren Lyons Cole, Money Editor for Consumer Reports.

So what does ID theft insurance actually get you?

Typically, coverage includes assistance in dealing with the aftermath of identity theft, which can be time consuming, like covering out of pocket expenses or supplying a case manager to make calls on your behalf.

"But this insurance isn't designed to alert you to identity theft. That's what identity protection services do. It's really there for what happens after you've been compromised," said Lauren.

Consumer Reports says taking matters into your own hands can be more effective and cheaper, like freezing your credit report and signing up for free online apps to monitor your checking and credit accounts daily.

If you do opt to purchase insurance, Consumer Reports says make sure you look closely at what you are getting and what you're paying for.

To view the full report from Consumer Reports, CLICK HERE.

Related Topics:
shoppingcredit cardshackingidentity theftwhat's the dealsaving with 6abcconsumerconsumer reports
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