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By timestaff
May 26, 2014

“I’d be very reluctant to pay for insurance,” says Neal O’Farrell, executive director of The Identity Theft Council “These policies tend to cover very little or have so many conditions that they are useless.”

First, understand that the insurance does not cover direct monetary losses incurred as a result of the theft; rather, it covers ancillary expenses you may rack up in dealing with the problem, like the cost of certain phone calls or certified mailings. Some policies will also cover lost wages and legal fees. But O’Farrell points out that most victims rarely incur legal fees or need to take time off work.

Most people don’t even need help paying off such costs: Javelin Strategy & Research found that 80% of ID theft victims had no out-of-pocket expenses. Among those who did lose money, the average was about $300 for existing-account fraud and about $1,200 for new-account fraud. But with deductibles for these policies generally ranging from $100 to $250, and sometimes going as high as $500, you could end up footing the majority of the bill yourself anyway.

Bottom line: This is one come-on you can skip.

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

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