The rise of identity theft incidents along with increasing general concern about their ramifications has prompted the property-casualty industry to offer products to ease those fears. [@@]
While banks and credit card companies for the most part reimburse customers for any false charges, p-c companies have focused on those expenses policyholders incur to get their lives back in order.
According to a recent survey conducted by Chubb, 28 percent of those polled fear it would take more than a year to regain their identity and clear their credit. Forty percent of those polled felt it would cost more than $1,000 to complete the process.
Most policies are riders to homeowners' coverage and will either hook clients up with the services themselves, or offer generally up to $25,000 to those customers who choose to take action themselves.
Travelers (now St. Paul-Travelers based in Hartford, Conn.) was the first p-c carrier to offer the coverage in 1999 when it made available for $25 a year a policy that today offers the $25,000 limit with no deductible. Claims include money lost from taking time off from work, and even wrongful incarceration, which will pay $1,000 a week for five weeks.
Another pioneer in the field was Chubb, Warren, N.J., which provides free coverage for its homeowners customers for the same $25,000 limit but with a $500 deductible.
Last year Allstate, Northbrook, Ill., got on the bandwagon with the introduction of its identity theft expense coverage product that is now available in 28 states.
At the time, the nation's second largest personal lines carrier was the first company to partner with a professional firm that specializes in addressing and correcting the effects of identity theft. But customers still have the option to do their own leg work and get reimbursement for services such as attorney fees, loan reapplication fees, credit report fees and lost wages.
Allstate spokesman Mike Siemienas noted that according to Federal Trade Commission data, only 13 percent of identity theft victims contact credit agencies after learning their personal information has been misused. "Many victims of identity theft don't know where or how to start the recovery process," he said.
This year both MetLife Home and Auto, Warwick, R.I., and Nationwide Insurance, Columbus, Ohio have starting offering coverage on their homeowners' polices.
Mathew Cullina, product development manager for MetLife Auto and Home, said that his company's service differs substantially from all others in that it is offered for free with no deductible. Policyholders can use the Identity Theft 911 for crisis resolution and defense services.
Also this spring, Nationwide Insurance introduced a similar ID theft resolution service for the clients for a $45 a year fee.
Some companies, however, have decided to stay out of the fray for the moment with State Farm, Bloomington, Ill., and The Hartford among them.
State Farm spokesperson Dick Luedke said the company is exploring the possibility. "But first, we have to look at what our customers needs are and can do to fulfill them," he said.
Meanwhile, State Farm agents are always educating their clients about precautions to prevent the situation from happening in the first place.
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