Does ID Theft Coverage on Homeowner's Insurance Add to the Insurance Premium?
You may never know how much your identity is worth until you lose it. Identity theft can ruin your credit and other finances, and potentially cost you thousands of dollars. Many homeowners insurance policies have some sort of identity theft protection available as an optional coverage to help cover these expenses. Decide for yourself whether this coverage is right for you.
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ISO Policy Forms
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Standard homeowners insurance in the United States is based on generic policy forms written by the Insurance Services Office, or ISO. Individual insurers use the ISO forms as a basis to write their own policies. All the ISO policy forms contain basic sets of coverage that come included in a homeowners insurance policy. Identity theft is not included in the ISO form, so insurers have not traditionally included it in homeowners insurance coverage. While many insurers now do provide some sort of identity theft protection as of 2011, it is usually available only by endorsement.
Standard Coverages
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The primary function of homeowners insurance is to repair or replace your home after a loss. The dwelling coverage provides money to do this. Standard policies also include extra money for separate structures on your property such as a detached garage, and money to replace your belongings. The policy also pays for additional living expenses if you must relocate after a loss while repairs take place. You get a minimum amount of personal liability coverage and no-fault medical coverage with standard policies, and higher limits are often available for additional premiums. Typically, any other form of coverage besides these will cost you more money.
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Identity Theft Protection
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Though insurers generally have the option of including whatever they want in standard coverage, provided their state's department of insurance approves it, most insurers consider identity theft protection as an optional coverage as of 2011. The benefit generally covers the expenses you incur while restoring your identity and credit, but does not do this work for you. It provides a financial benefit but not an actual service. Some insurers, such as Farmers Insurance, offer limited services such as credit report monitoring so you can be alerted to suspicious activity before it becomes more problematic.
Cost
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Consumer Reports advises that many people don't see a benefit from their homeowner insurance's identity theft protection that warrants the cost involved. Only you can decide if you are willing to pay the extra cost involved for this coverage. Farmers Insurance states that its Identity Shield protection costs about $65 per year as of 2011. Prices vary between insurers, and may even vary depending on your type of homeowners insurance.
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References
- Photo Credit thief image by jeancliclac from Fotolia.com
