Do I need Identity Theft Insurance?

Identify Theft Insurance, what is it?  Well, of course, that varies from carrier to carrier, but the primary benefit you receive from Identity Theft Insurance is hassle-reduction.  Most carriers offer a service that will simply take care of all the details for you.  From contacting the primary credit agencies to closing cards and writing letters.  Some offer emergency cash should you find your accounts drained of resources.  Some offer, "emotional support".  Really!  Imagine that!  Your insurance company offering you emotional support.  And for a fee no less!

Fundamentally, current consumer laws limit your individual liability from Identity Theft.  If someone steals your identity you have legal recourse to limit your individual liability.  Depending upon the institution you have varying degrees of liability.  For instance, for any organization that extends credit your maximum liability is $50.  Contracts that are entered into by means of identity theft are unenforceable.  And emotional support can be found many places, not just through your large monolithic insurance carrier.  Should you be victimized by identity theft, you can use the attached affidavit to file a report with each company affected.  Click here

So the real question is, how much hassle are you willing to take on yourself and how much are you willing to pay someone else to assume that hassle on your behalf?  Your time is valuable.  You should be able to place a dollar figure on your own time.  You should estimate that it will take 20 hours of effort per organization affected should you experience Identity Theft.  So, is your time better spend on resolving identity theft issues or other priorities?  Only you can answer that question.  So, don't buy Identity Theft Insurance to reduce your financial liability (it already is limited).  Buy Identity Theft Insurance if you feel your time is better spent in other ways than resolving conflicts.  For my money, I'd rather do the leg work myself to ensure my good name is restored, but then again, that's only me!