Travelers introduces Identity Fraud Coverage
By Tom Tropp, Jr.
Operations Manager
Tropp & Company, Inc.
Cases of identity fraud are dramatically on the rise. Consumers are usually alerted to an identity fraud when a merchant—or their collection agency—contacts the consumer seeking payment for a bill that the consumer knew nothing of. Or, worse yet, the consumer may be declined for a loan due to a credit report that recorded defaults on loans that were previously unknown to the consumer.
In cases of identity fraud, criminals assume the identity of the consumer/victim for the purpose of taking over the victim’s accounts and/or obtaining and using credit in the name of the victim, usually with the goal of fraudulently obtaining financial gain.
The occurrence of Identity Fraud against U.S. consumers has increased dramatically in recent years. In 1992, credit reporting agency Trans Union received 35,000 calls with questions or complaints about identity theft. In 1997, that number increased 15 fold, to 523,000 (over 1,400 calls per day). Further, in 1997 the United States Secret Service alone reported $745 million in actual losses attributable to identity fraud (the USSS investigates financial crimes related to identification documents).
In such cases, banks and other credit grantors — not the consumer — absorb most of the losses. However, while often not responsible for the funds that the criminals fraudulently obtain, victims of identity fraud are left with ruined credit histories that can require hundreds of hours and sometimes significant expenditures to clear and restore.
In order to provide protection against expenses incurred as a result of the growing hazard of identity fraud, Travelers has introduced a unique endorsement to homeowners policies: Identity Fraud Expense Coverage. Travelers is the first insurer to offer this protection to consumers. This new Identity Fraud Expense Coverage endorsement provides coverage for these expenses that individuals can incur—at their own expense—in their efforts to restore their financial health and credit history after an identity fraud. Coverage features include:
- Lost wages as a result of time taken off from work to deal with the fraud
- Notary and certified mailing costs for completing and delivering fraud affidavits
- Loan re-application fees for re-applying for loans which were declined, due to erroneous credit information that had reflected the fraud
- Phone charges for calling merchants, financial institutions and law enforcement agencies to discuss an actual fraud
- Attorney fees incurred, with Travelers’ prior consent
Note: The loss, itself, and any expense not described in the endorsement are not covered.
For more information on this endorsement, feel free to call Dan Tropp, personal insurance sales agent, or Tom Tropp, Jr., Personal Insurance Services Manager.
Coverage Highlights:
- Worldwide coverage.
- Protection applies to the insured and relatives living in the insured's household.
- Coverage applies to identity fraud resulting from internet usage by any insured.
- $15,000 limit per loss, with no aggregate limit.
- $100 deductible per loss.
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