Insurance policies offered to cover expense of ID theft

COLUMBUS, Ohio -- The thieves who stole Amy Jo Sutterluety's identity spent $70,000 in her name. They also took her time: a month to close 15 fraudulent accounts.

Insurance policies to cover her out-of-pocket expenses for phone calls and legal battles didn't exist back in 1998 -- when she was victimized -- though she wish they had.

"Having been through it, I would say it's well worth the $25 rider," said Sutterluety, an associate professor at Baldwin-Wallace College.

Still, experts have mixed feelings about the growing number of companies that offer such coverage.

Travelers Insurance of Hartford, Conn., first offered an identity theft policy in 1999. Cincinnati Insurance Cos. and Columbus-based Grange Insurance are among those that since have added the coverage, usually as a rider to a homeowner's policy.

The product has been slow to take off, being added to 1 percent or less of policies, and few if any claims have been filed, representatives of the companies said.

The insurance covers expenses to restore credit -- copies, mail, calls, time lost from work, even attorney fees. Premiums range from $10 to $40 for up to $25,000 in coverage; most policies have a $100 or more deductible.

"It's not one phone call to these companies, it's a dozen phone calls, it's a dozen letters," said Linda Foley, a victim and director of the San Diego-based Identity Theft Resource Center.

The Department of Justice estimates there are 500,000 to 700,000 identity theft victims a year.

"Given the occurrence and risk of identity theft, and given the real inexpensive nature of this coverage, consumers would be well served to carefully consider getting this kind of coverage," said Todd Boyer, spokesman for the Ohio Department of Insurance.

Victims have testified before Congress that they must cancel a fraudulent account several times because collection agencies keep reopening the cases. Some have lost jobs because of criminal charges filed against the person using their identity, the FTC reported.