If you’re the victim of identity theft, the costs may go farther than just what’s stolen. Continue reading to learn more about what you might lose and how to cover your losses.
What are the Costs of Identity Theft?
There are several costs that you may face following an identity theft.
- Money stolen directly from your bank account.
- Late fees on your bills if you can’t pay them while your accounts are frozen.
- Bank fees for replacement debit and credit cards.
- Lost wages if you have to take time away from work.
- Mailing expenses for certified letters.
- Fees for credit monitoring or additional copies of your credit report.
- Credit repair services.
- Legal fees.
- Other related costs.
What Will Your Bank’s Fraud Protection Cover?
When your bank advertises fraud protection, it usually only means for unauthorized transactions. Any withdrawals from your bank account or charges to your credit card will be reversed if you file a claim in accordance with your bank’s policies.
Your bank will often also usually waive its own overdraft or late fees, although this is generally more of a courtesy than something the bank is required to do. Except in cases of bank error, your bank generally won’t reimburse you for the other costs of identity theft such as a late fee charged by your landlord or attorneys’ fees.
How Long Does Bank Fraud Protection Take?
Even when you have fraud protection, it isn’t instant. The good news with credit cards is that you don’t have to pay potentially fraudulent charges while they’re under investigation, so you don’t lose anything other than the ability to use that card. For debit and ACH transactions, you may not get your money back for several days or even weeks while the bank investigates. This could create a longer period of time where you’re unable to pay your bills.
Can You Sue for Identity Theft?
You can potentially sue for identity theft. One potential defendant is the identity thieves who are probably overseas and out of reach. More often, you’d sue the company whose lack of security created the opportunity for the data breach. However, lawsuits take time, and there’s no guarantee you’ll be reimbursed in full. In some cases, you’ll be lucky to get free credit monitoring even out of a class-action lawsuit.
What Does Identity Theft Insurance Do?
Identity theft insurance covers the extra costs related to identity theft. It doesn’t cover the direct financial loss that your fraud protection covers, but it will take care of things like legal fees, credit monitoring, and lost wages. Exactly what’s covered and the limits will depend on your specific policy, so be sure to review the terms.
You can purchase this coverage as an add-on to an existing policy, such as homeowners’ insurance, or as a separate policy. Luxor Insurance can help you find the coverage that’s right for you. Give us a call today to learn more.