October 15, 2014 by Canadian Underwriter
The Insurance Information Institute (III) is encouraging vigilance to mark National Cyber Security Awareness Month in the United States and in the wake of recent figures showing that identity fraud is on the rise for the second consecutive year.
Citing figures from the Federal Trade Commission, III reports that identity fraud affected more than 13 million consumers in 2013. Consumers suffered total fraud losses of more US$18 billion, averaging US$2,294 per incident, and more than 11 hours trying to resolve the average case, notes a statement this week from III.
Individuals should review their bank statements and credit card bills to confirm all transactions listed are legitimate, as well as be vigilant when using smartphones, tablets and other devices that store personal information digitally, III suggests.
Data theft scams are likely to increase as the holiday season approaches, the institute reports, adding that most homeowners and renters policies provide coverage for theft of money or credit cards. That said, the amount of coverage is limited — usually $200 in cash and $50 on each credit card, the statement adds.
While some insurers include coverage for identity theft as part of their homeowners insurance policies, others sell more comprehensive coverage as a stand-alone policy or as an endorsement to a homeowners or renters insurance policy, the statement notes.
Identity theft insurance will reimburse a policyholder for expenses incurred to restore his or her identity – up to the limits stated in the policy – and coverage limits can range from $10,000 to $1 million.
The insurance generally covers expenses such as phone bills, lost wages, notary and certified mailing costs, fees when reapplying for loans, grants or other credit instruments and sometimes attorney fees (with the prior consent of the insurer).
Some companies also offer restoration or resolution services that will guide a person through the process of recovering your identity.
A tip sheet from III notes that almost half of identity theft cases are the result of a lost or stolen wallet, cheque book, credit card or other physical document. But as online shopping becomes increasing popular, it can also pose an identity risk.
III offers, among others, the following tips for avoiding identity theft: