I was speaking at a conference last week and the subject of insurance protection for identity theft came up in the Q & A portion of my talk. I’m not a huge fan of this type of insurance because I believe there are far more effective ways to protect your identity than paying $15 per month to have an institution register your credit cards and monitor the activity. Sometimes this type of insurance only covers the legal fees associated with having your identity stolen; often in excess of $10,000.
Insurance coverage cannot prevent identity theft; it only helps to detect it and cover losses associated with it. You are the best form of insurance to protect your identity. The top five ways to ensure no one steels your identity are:
1. Don’t leave your bank statements, credit or banking cards in places where someone could steal the information. If you’re using a shared computer to do your banking, clear the computer’s history before you leave the terminal. Do not lend your banking cards to anyone; even a close friend.
2. Protect your passwords. When you enter in a pin number for a purchase, cover the key pad. If you bank online or use sites like PayPal for purchases, change your passwords regularly.
3. Shred any documentation that has personal information such as your name or address on it. You can buy a shredder for $20 at an office supply store.
4. Read your bank statements and monitor your account activity. If you see anything that looks fishy, call your bank immediately.
5. Check on your credit score regularly to ensure there are no items you don’t recognize on it. If there are, contact the credit bureau immediately to have the issue investigated and resolved.