Insurers offer protections against identity theft: Is it worth it?

Michael Finney Image
Wednesday, November 9, 2022
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One 7 On Your Side viewer says an identity theft prevention service protected him after he was impersonated twice.

SAN FRANCISCO (KGO) -- "Identity theft is on the rise," says Janet Ruiz from the Insurance Information Institute. "30 percent of all the identity theft claims are for credit card new subscriptions. So, people stealing your information and starting a new credit card under your name."

The bad guys go where the money is, and now that's often where your identity and financial accounts converge.

Alma Galvan is with the Better Business Bureau. "We used to see scams targeting a lot of senior citizens. But now, with everything being accessible online, we're actually seeing scams targeting the younger generation," she says.

Casey Johnson signed up for LifeLock Identity Theft protection around 2015. "I was in the process of wanting to buy a home, and being a single parent, I didn't want any disruptions or interference," Johnson says.

And good thing he bought that protection. An identity thief racked up arrest warrants for traffic violations and Johnson's job was on the line.

"I tried to take care of it on my own but between the Department of Motor Vehicles, the police department and the courthouse, it was too much," he says, "then I remembered that I had LifeLock."

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LifeLock finished cleaning up the identity theft mess, paid out $1,200 for attorneys... then Johnson was hit again.

"There was an attempt to open a credit card account for the balance of about $12,000. LifeLock contact me and asked me if it was me, and it was a simple response, 'No'." Johnson says it all went very smoothly. "They were able to stop that credit from being issued."

According to David Putnam with Norton LifeLock, "It's a three-layered approach. 'How can we prevent something from happening,' monitoring in the background, and then, at the end, restoring you back to normal. Whether that's making your credit be the way it was, or making you financially whole again through reimbursements and things like that."

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LifeLock says it will reimburse as much as $1,000,000 in funds lost to identity Theft.

When asked if LifeLock has ever paid out a million dollars, Putnam answers, "Yes, we have. Yeah, in the last twelve months we've seen over $60 million dollars in claims coming in from our members. We resolve 99.5 percent of those claims."

There are many companies offering identity theft protection, among them some of the largest names in homeowner's insurance like Statefarm and Allstate.

Safeco, for instance, offers a policy that includes $25,000 in reimbursements for getting your good name back. The cost: one dollar a month.

The Identity Theft Resource Center's Eva Velasquez says a policy can be a good purchase, but you still have to stay involved.

"You have AAA to help you out in the event of some kind of roadside issue: a flat tire, a dead battery. But that doesn't really mean you can allocate all responsibility for safe driving on the road. We have to play our parts as well," she says.

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We'll give the last word to Casey Johnson: "... just one of the best decisions I ever made was to do that. I'm not sure if I would be where I am had I not had that protection and reimbursement," he says.

Many of these policies offer more than identity theft protection, they actually offer fraud protection. So when looking for protection see what they monitor, what they pay for, then buy what just you need.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

7OYS's consumer hotline is a free consumer mediation service for those in the San Francisco Bay Area. We assist individuals with consumer-related issues; we cannot assist on cases between businesses, or cases involving family law, criminal matters, landlord/tenant disputes, labor issues, or medical issues. Please review our FAQ here. As a part of our process in assisting you, it is necessary that we contact the company / agency you are writing about. If you do not wish us to contact them, please let us know right away, as it will affect our ability to work on your case. Due to the high volume of emails we receive, please allow 3-5 business days for a response.

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