Many people trust their personal information to dozens if not hundreds of companies. Our banks, utility companies, and places where we purchase goods and services generally have access to our personal information including our Social Security number, bank account information, address, passwords, and much more. This information is sensitive and having it stolen can turn your life upside down.
In recent years, there have been major data breach events that have left numerous people with exposed personal information that bad actors want to obtain to use for elicit activities.
Some of the potential risks of identity theft include:
- Stolen money from your bank account.
- Having an unknown line of credit opened in your name.
- A ruined credit score.
- Debt that you did not take out.
- Criminal history.
- New mortgages or liens on your home.
- Compromised personal information and accounts.
Repairing the problems caused by identity theft can be difficult. Legal action may be necessary to remove fraudulent liens or mortgages. There may also be new credit accounts in your name that need to be disputed. Your credit report will likely have negative information tha will need to be favorably resolved. Sometimes, you may need to pursue legal actions against a financial institution that was also duped into permitting an unauthorized transaction. In short, a stolen identity can lead to a wide variety of complicated problems.
With the rise of fraudulent activity, some insurance companies have begun to offer identity theft and unauthorized transaction insurance coverage. Some of these insurance policies are sold on their own. Others are sold as part of a package from a credit monitoring company such as Experian.
Each insurance company is different, but identity theft insurance generally provides money to correct the problems associated with identity theft, which may include:
- Legal fees
- Money for the cost to replace important documents.
- Lost wages.
- Costs to correct credit information or credit reports.
- Fees charged by financial institutions associated with correcting inaccuracies.
These policies acknowledge that the problems associated with identity theft are complicated and costly. However, like all insurance companies, identify theft policies must also return or profit for the insurance company.
Unauthorized Transaction Insurance Coverage
Perhaps the most costly problem associated with someone stealing your personal information is hacking into your bank account and stealing money. Although financial institutions claim that our accounts are secure, in reality, hackers are constantly attempting to steal confidential information and sometimes they succeed.
Hackers, thieves, and scam artists have perfected various schemes aimed at gaining access to your personal accounts. These schemes include:
- Pretending to be a bank representative.
- Hacking into a corporate database.
- Accessing personal information through a phishing attack or virus.
- Having funds diverted to another account fraudulently.
Once money has changed hands and been diverted to a different account, the chance of recovering it is minimal. However, the reason why you purchase insurance is because mistakes happen. The truth is unauthorized financial transactions are on the rise. ‘
Bad Faith Adjusting Practices with Identification Theft Insurance
From our experience, many identification theft claims tend to be denied. One of the most common excuses for not paying these claims is that the insurance company cannot rule out that its customer – the policyholder – was not involved in the theft of funds or stolen identity. In other words, the insurance company expects a claimant to prove who committed a criminal act before a claim can be paid.
A policyholder’s duty when presenting a claim is to demonstrate that he or she had a loss that is covered by the policy. The fact that you made a claim for an unauthorized transaction is no different. You typically need to present evidence in the form of bank statements to demonstrate that the funds were stolen without authorization. Bank statements are sufficient evidence to demonstrate that a financial transaction occurred. Evidence such as police reports, reports to financial institutions, and other actions demonstrating that you reported and contested the transaction helps demonstrate that the transaction was indeed unauthorized.
Insurance companies often fail to follow the law when adjusting claims that can result in a big loss for the insurance company. The law, at its core, is simple. The policyholder only has to produce evidence of a loss covered by the policy. The insurance company has the burden to prove that the claim is excluded under the policy. It is really that simple.
Contact the experienced bad faith insurance attorneys at Johns Law Group to discuss any issues you may have with an identification theft or unauthorized transaction insurance claim. You can reach us at (866) 970-0977.