Updated: December 2016
After a disaster, you may be focused on the basics, like finding a safe place for you and your family to stay. Unfortunately, criminals may use these difficult situations for their own gain through what the Federal Bureau of Investigation (FBI) calls disaster fraud.
If you have to quickly evacuate your home or it sustains damage, personal documents may be lost or left behind. These items often contain personal information, such as Social Security or credit card numbers, and can be used by thieves to open accounts in your name or to make purchases, says the FBI.
How can you prepare? Taking steps to prevent identity theft is one way. And having identity restoration coverage in place may help you recover if identity fraud happens to you.
During a time when you and your home may be particularly vulnerable, it's important to pay attention to the potential threats of identity theft and fraud. The Insurance Information Institute (III) notes that nearly half of all identity theft cases occur after the loss or theft of a wallet, checkbook, credit card and other personal documents.
It can be very time-consuming and costly to restore your credit and clear your name after your identity is compromised, states the III. If you have identity restoration coverage, however, you may be able to get help. Identity theft insurance coverage typically helps reimburse you for the costs incurred while repairing your credit reports, including expenses such as phone bills and certified mailing costs. It may also help cover lost wages and, in some instances, may help with related attorney fees. Some insurers may also provide services that will help you through the credit restoration process, says the III.
The National Association of Insurance Commissioners (NAIC) states that if you do not currently have identity theft insurance, you may be able to add it to your existing homeowners or renters insurance policy. If you cannot add a rider or endorsement to your current policy for this coverage, you may be able to buy a standalone identity theft restoration insurance policy from another insurance company, bank or credit card provider.
While identity restoration coverage may help protect you against the costs of reclaiming your financial identity, the NAIC notes a few things you may want to keep in mind. Identity theft coverage typically:
- Does not provide protection against direct monetary loss
- May limit coverage (for example, up to $25,000) when included in a homeowners or renters policy
- Includes a deductible, which means you'll typically be responsible for a set amount of the initial costs of your credit restoration
You can help protect yourself from identity theft and other disaster fraud with some basic preparation. The IDT911 Identity Management Blog provides the following tips to help keep your identity and finances safe:
- Store front-and-back copies of personal documents, such as birth certificates, Social Security cards and credit or debit cards, in a safe deposit box.
- Check your credit report regularly, and, if a natural disaster strikes your area, consider adding a security alert. These alerts may help creditors verify your identity before someone uses your information fraudulently, says Experian.
- Watch out for potential post-disaster scams, including calls, texts or emails soliciting donations.
Protecting your identity, and ultimately your finances, may not be the first thing that comes to mind during a disaster situation. Unfortunately, it's something that can have consequences if you're not prepared. Having identity restoration coverage in place may offer some help if your identity is compromised. If you're interested in identity theft coverage or have questions, a local agent can help.