Identity theft and fraud is one of the fastest growing crimes in the country, and affects more than 500,000 consumers every year. Thieves steal names, addresses, credit card numbers, social security numbers and other personal information from unsuspecting consumers and steal their money, charge up credit cards and, in some cases, buy homes, boats and cars. Some local insurance agencies are now offering customers identify theft insurance in response.
Amica Mutual Insurance Company offers an identity theft insurance policy, which provides a $15,000 coverage limit with a $250 deductible for expenses incurred including affidavits, certified mail and attorney’s fees. The coverage is offered as an add-on to the tenants, homeowners and condominium insurance, according to Helen MacNeil, senior assistant to the vice president of the production department.
Amica has been offering the insurance for a few months, MacNeil said, and the policy is offered at the homeowner’s policy renewal date.
“Amica thinks this coverage is addressing a need in the community because of Internet hackers and the like who may be able to steal your personal information,” she said. “Identity theft is becoming widespread and we want to protect our policyholder’s needs by offering this coverage.”
Glover-Padula Insurance, one of the independent agencies working within Gencorp Insurance Group, based in East Greenwich, is a Rhode Island agency that also began offering this insurance a few months ago.
“Our major carriers do provide coverage for certain expenses people can incur in attempting to get back their identities,” said Joyce Hartman, vice president of Glover-Padula Insurance and an agent. The agency provides the insurance – through Travelers Insurance – as an endorsement on its homeowner’s policy. The identity theft insurance has a $15,000 coverage limit for those expenses, a $100 deductible and costs $25 a year.
The endorsement covers costs including legal expenses, lost wages, loan re-application fees, telephone and certified mailing charges and notary charges. It also covers identity fraud resulting from Internet usage.
“Nobody ever wants coverage until after they’ve experienced a loss,” Hartman said, adding that the same applies to the identity theft insurance. “Cases of it are on the rise.”
In 1992 credit reporting agency TransUnion reported that it received 35,000 calls from people with questions about or complaining of identity theft, she said. By 1997, that number had skyrocketed to 523,000 calls, or 1,400 a day, from people who had their identities taken from them by thieves. The U.S. Secret Service alone in 1997 reported $745 million in actual losses that could be attributed to identity fraud.
Hartman estimated that Glover-Padula Insurance has 25 clients enrolled in the homeowner’s insurance with the additional identity theft policy. It’s a tough sell to people who are skeptical that they’ll ever need that type of insurance, though, she said.
“We’re going to do another drive soon,” to educate the public about the availability of the insurance, Hartman said. “Not a whole lot of people have called because they don’t think it can happen to them.” In this case, hindsight is definitely 20-20.
Hartman said that when clients do come to her asking about the identity theft insurance, usually it’s from seeing a program on television about the crime or reading a story about it in a magazine or newspaper. Sometimes it takes a little prodding from family or friends as well, she said.
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