Why do I need coverage?

It won’t happen to me.

Would you answer “yes” to any of the following questions? If so then see the responses below for even more insight.

  1. I don’t use credit.
  2. I already have a fraud alert on my credit report for free.
  3. I’m covered under my homeowner’s policy.
  4. I review my credit report on a regular basis and will detect any fraud.
  5. The chances of it happening to me are remote. I’ll deal with it when it happens.

Comments such as these are commonplace and here are some responses to think about:

  1. I don’t use credit.

    But you do have a name, address, social security number and possibly a driver’s license or bank account.

  2. I already have a fraud alert on my credit report for free.

    Statistics report that 79% of identity theft happens with existing accounts, not the fraudulent use of new accounts. Fraud alerts help alleviate the opening of new accounts but are no help with existing accounts.

  3. I’m covered under my homeowner’s policy.

    What is the exact coverage you have? Insurance may reimburse you for some financial loss up to a certain amount, but does nothing about the hundreds of hours it may require to repair the damage. With large deductibles and exclusions you may find there is little if any coverage. That is up to you.

  4. I review my credit report on a regular basis and will detect any fraud.

    You are allowed one free credit report each year from a credit reporting agency. If fraud is detected you must take it upon yourself to call the creditor, resolve the issue and then notify each of the credit agencies where the discrepancy appears.

  5. The chances of it happening to me are remote. I’ll deal with it when it happens.

    Like fire, flood, earthquake insurance or even AAA for your car, it pays to have a plan of action before the catastrophe happens. Coverage after the fact doesn’t help you.

Your information is everywhere.

If still skeptical consider some of these major corporate breaches that have been in the news.

  • Heartland Payment Systems — Attackers illegally accessed the fifth largest credit card processing center. Extent of the damage is still unknown.
  • Countrywide — An employee stole and later sold loan application information on over 2.2 million customers.
  • TJ Maxx — Attackers found wireless access points into their computer system via a laptop computer compromising 94 million customer records.
  • America Online — An employee stole 92 million email addresses and later sold them to a third party to bombard the recipients with spam.
  • U.S. Department of Veteran Affairs — A VA laptop containing personal information on over 26.5 million military personnel was stolen during a routine burglary.