What is Identity Theft Insurance in Texas?
Identity theft insurance in Texas is the type of insurance that covers the costs related to identity theft. It does so by reimbursing you (the insured) the money you spend on getting your financial identity back in order. In some cases, identity theft insurance can help recover the financial losses incurred as a result of the identity theft. Recovering from identity theft can be time-consuming and expensive. And that is where identity theft insurance comes in.
Identity theft has far-reaching implications for Texans, including damage to people’s credit, reputation, and causing financial loss. The problems and issues that come with having to deal with this process require a significant amount of time and paid professional assistance to resolve. As a result, many insurers now provide insurance packages to help with identity recovery.
Different identity theft insurance companies may offer drastically different coverages to choose from. Some policies cover the actual financial loss, while others concentrate on providing coverage for the “clean up” of your life, as the aftermath of the identity theft.
What is Identity Theft?
Identity theft is the acquisition of another person’s personal information that can be used to pretend to be them, to defraud them, and perpetuate other crimes using their identity. Identity thieves may transfer the victim’s assets to an unknown destination or impersonate the victim and take advantage of their insurance and health benefits. This type of crime can only be possible if the imposter obtains critical pieces of Personally Identifiable Information (PII), such as;
- Social security number
- Driver’s license number
- Name and date of birth
- Biometric data that is unique to a person, such as a fingerprint, voiceprint, or retina or iris image
- A unique electronic identification number, address, routing code, or account number from a financial institution
- Identifying information about a telecommunication device or an access device
- Other forms of government-issued identification
The information obtained could be used to steal from the victim by applying for credit and purchasing products and services in the victim’s name. In rare situations, the impostor may construct a criminal record or even leave the individual whose identity has been stolen with outstanding arrest warrants.
Texas Penal Code (Chapter. 32, Section. 32.51) defines identity theft as a criminal offense. As a result, anyone who illegally obtains information that could be used to gain access to an individual's financial resources is subject to prosecution under this legislation.
Online transactions have become popular over the years, making it easier for thieves to steal an individual’s identity. Using the internet, identity thieves take advantage of smart devices to steal other people’s personal information. One way they do this is by examining the hard drives of stolen or discarded computers. They hack into computers or computer networks and access public documents.
The health care system in Texas is no stranger to identity theft. Health identity theft occurs when someone obtains your personal or medical insurance information and uses it to receive medical treatment, medicines, or insurance benefits, stiffing you with the resulting bills.
To combat health insurance identity theft in Texas, victims can file a complaint with the Attorney General and with the Inspector General of the Texas Department of Health and Human Services. If you suspect fraud with Medicaid, you should report it to the Medicaid Fraud Control Unit. This unit can be contacted through any of the mediums below:
Medicaid Fraud Control Unit at the Office of the Attorney General,
P.O. Box 12548
Austin, TX 78711
Email: MFCU@oag.texas.gov
Phone: (512) 371-4700 / (800) 252-8011
Fax: (512) 320-0974
What Are The Most Common Types of Identity Theft in Texas?
The most common types of identity theft in Texas are:
- Financial Identity Theft - is where your Personally Identifiable Information (PII) is stolen to be used to steal more money either from your accounts or from others, by pretending to be you while making purchases.
- Medical Identity Theft - is where your medical information is stolen and used to file fraudulent insurance and workers compensation claims by people posing as you.
- Social Security Identity Theft - is where a criminal pretends to be you, by using your Social Security Number (SSN). The thief might apply for state or federal benefits, apply for loans, open credit cards, get a mortgage, or just get an ID using their own picture and your identity.
- Criminal Identity Theft - is where a criminal uses your identity as a cover during their shady activities or during the arrest. For example, if a criminal looking like you uses your stolen drivers license to rent a car and then uses it as a getaway vehicle after a robbery, chances are that the police will come knocking on your door. In this case you might be able to clear the issue right away. But what if the criminal keeps racking offenses like traffic tickets on your record and eventually your insurance rate skyrockets and your driver's license gets suspended? Now you need to spend time and money on clearing your own record.
Can You Get Insurance For Identity Theft in Texas?
Yes, you can get insurance for identity theft in Texas.
Texas Insurance Code (Title 5, Sec. 706. 002), allows any insurance company that is licensed to deal in Property and Casualty (P&C) insurance in Texas to offer identity theft insurance coverage to their policyholders.
Most Property & Casualty (P&C) insurance companies offer identity theft protection (also known as Identity Theft Coverage) as an extra option (A.K.A. Rider) that you can purchase with your homeowners’ insurance policy. However, some insurers on the Texas market might have it already included in the basic homeowner’s insurance package. Check your current homeowners insurance coverage. You might already have it.
If you do not currently have Identity Theft coverage listed on your policy and you want to add it, contact your insurer or your Texas-licensed insurance agent to make the change.
Do Credit Cards Cover Identity Theft?
Yes, credit cards cover identity theft, to a point. If someone fraudulently uses your credit card (online or in person), by federal law your liability for those purchases is limited to $50. This is also known as Fraud Protection.
Identity Theft Insurance vs. Identity Theft Protection
Demystifying the difference between ID Theft insurance and ID Theft Protections services:
What Does Identity Theft Insurance Cover In Texas?
Texas identity theft insurance compensates you (the insured) for the loss by reimbursing you some or all of the costs that were incurred in the required process to recover your identity and restore your credit. The most comprehensive identity theft insurance coverage includes repayment for fraudulent charges or stolen funds, as well as on-going credit monitoring.
What Does Identity Theft Protection Do?
Identity theft protection is a type of service that helps you with early detection of potential fraud and identity restoration. This service looks for evidence of your personal information, primarily concentrating on unregistered and suspicious platforms. Identity theft protection service is not insurance.
Some of the information such service looks out for includes the use or mention of your:
- Driver’s license number,
- Medical ID number,
- Banking information, and your
- Social security number - which is a key to a lot of your personal accounts and records, especially when used with another piece of your personal data.
These services do the major homework for you by searching to see if your personal information is available on the dark web, social media, or other databases that could suggest a criminal has your information. They then assist you in resolving the problem if your information is compromised and may also help in covering legal fees and other costs associated with reclaiming your identity.
In addition, several government agencies and Texas nonprofit groups also help by providing information and tools to help people prevent, avoid, and report identity theft incidents.
Where Can You Get Identity Theft Insurance in Texas?
You can get identity theft insurance by:
- Talking to a Texas-licensed insurance professional who can help you choose the most appropriate source of coverage, according to your needs.
- Major home insurance companies offer a version of identity theft coverage as an add-on (Rider) to the homeowners or renters policy. Check with your insurer about the available coverage.
- If you are already paying for an identity theft protection or a credit monitoring service, check to see if it also offers identity theft insurance to its members.
How Much is Identity Theft Insurance a Month?
The average cost for identity theft insurance in Texas is $7 to $15 per month. These costs vary even more depending on the level of service you select. Since several insurance companies and brokers offer identity theft insurance in Texas, there is no predetermined fee, but you might be able to save by bundling this coverage with your homeowners or renters insurance.
On the other hand, identity theft protection services offered in Texas may cost $15-$35 a month, depending on your selected provider and your choice of coverage.
Is Identity Theft Insurance Worth It in Texas?
Yes, identity theft insurance in Texas is worth it.
The real question is: How much identity theft coverage do I need? The answer comes down to each individual Texan’s needs. What are your exposures and possible liabilities? How much are you exposed to the possibility of identity theft and what do you stand to lose if your identity is stolen or compromised?
Although not everyone may afford the cost, identity theft insurance is worth it. The fact that it covers the cost of repairing your identity if you become a victim of fraud makes it one of the best ways to survive during an identity theft trauma.
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