Before I went to law school, I was a buyer for a large pharmaceutical company. I worked in a manufacturing facility and my boss was teaching me how to negotiate large contracts. He boiled all the advice you need when it comes to contracts down to one sentence–the big words giveth, and the small words taketh away. His advice has served me well on many occasions, and it will serve you well when it comes to identity theft insurance.
As part of various identity theft protection services, some companies offer some type of guarantee or insurance if you use their service and still suffer a loss due to identity theft. Two of the more popular services our LifeLock and IDENTITY GUARD. LifeLock offers what it calls a “$1 million Service Guarantee,” while IDENTITY GUARD offers “$1 Million ID Theft Insurance” with its EXTRA CAUTION program.
While a guarantee and insurance may seem similar, they are in fact two totally different forms of protection. The LifeLock $1 million guarantee basically protects you against loss resulting if LifeLock makes a mistake in the services they provide to you. In contrast, with IDENTITY GUARD you are actually getting an insurance policy that offers certain protections if your identity is stolen, regardless of whether it’s the fault of IDENTITY GUARD.
Let’s take a look at each for of identity theft protection.
LifeLock’s $1 million Service Guarantee
According to LifeLock’s website, here’s what its $1 million Service Guarantee gets you:
LifeLock works to help stop identity theft before it happens by taking proactive steps to reduce your risk. But if you become a victim of identity theft while you are a LifeLock member because of some failure or defect in our service, contact us and we will act on your behalf to repair any damage. We will spend up to $1 million to hire lawyers, investigators, consultants and whatever else it takes to restore your name and help you recover the direct losses from the identity theft.
The key language is in bold text. The guarantee only kicks even if LifeLock’s services are in some way defective or the fail to provide the ID theft protections in its service. But if you identity is stolen by not fault of LifeLock, you’re on your own.
IDENTITY GUARD’s $1 Million ID Theft Insurance
In contrast, IDENTITY GUARD’s $1 Million ID Theft Insurance is a complete insurance policy with the following limits:
- Aggregate Limit of Insurance: $ 1,000,000 per policy period
- Lost Wages: $ 1,000 per week, for 4 weeks maximum
- Travel Expenses: $ 500 per policy period
- Elder Care and Child Care: $ 2,000 per policy period
- Deductible: $ 0 per policy period
Like all insurance policies, there are a number of terms and conditions to read and understand, as well as exclusions. But unlike LifeLock, IDENTITY GUARD’s insurance covers you regardless of whether the identity theft was the result of a defect in IDENTITY GUARD’s services.
Whether you need identity theft insurance is another matter entirely. But if you are considering some form of ID protection, it’s important to read the fine print.
Published or updated February 16, 2013.