Is Identity Protection Worth Buying From My Insurance?

Identity protection is both vital and extremely challenging in 2024. Practically every month, another major data breach causes millions of customers to receive emails notifying them their personal information “is on the dark web.”

But unless you want to avoid all the convenience of digital life, it’s difficult to avoid at least a single instance of a company failing to protect your data.

Everyone and everything from Google to A.I. to your Uncle Jack to every financial “guru” on social media has opinions about the best strategy or product to help you defend yourself. But many times, money, and perhaps even commissions, are involved.

Should I Buy Identity Protection From My Insurance Company?

My insurance company will give me a form of identity protection for just $36 a year. Should I take it?

It sounds like a great topic to ask money expert Clark Howard for advice. And that’s just what a Clark listener did recently.

Asked Blanca in Florida: “My insurance is offering an identity restoration plan for $3 a month and here is what it does: full-service restoration, dedicated specialists, 24/7 live support, up to $25,000 in expense reimbursement. Do you think it’s worth it?”

I'll get into Clark's opinion on the services the insurance company offered Blanca later in this article. First, know this: the best way to protect your identity is to freeze your credit . That way, even if a criminal accesses your information in a data breach, they won't be able to open a line of credit in your name.

“The question, Blanca, is do you have your credit frozen?” Clark says. “The greatest insurance any of us can have against the hassles of identity theft — and it won’t cover every last possible permutation — but a credit freeze is the greatest thing you can do.

“And still today even though millions of Americans have their credit frozen, most don’t.”

Is Identity Protection Worth the Price Tag?

Before we go any further, realize that one or more of your credit cards may offer this type of identity protection for free.

“It’s not worth the $36 a year,” Clark says. “These identity theft things that say, ‘We’ll cover up to $X.’ Most of identity theft is not going to be the loss of actual funds. It’s going to be the hassle involved.

“And the value of [the things Blanca mentioned] I find is not really great.”

How Much Does Identity Protection Cost?

Blanca’s offer for $36 per year in exchange for an “identity restoration plan” seems to be on the low end of the market.

For example, the Allstate Identity Protection plan offers multiple packages. But its cheapest and most basic annual individual package will set you back $108.89 the first year and $119.88 per year going forward.

Again, you may get a lot of the same protections from one or more of your credit cards for free. And freezing your credit is going to go further in protecting your overall assets and financial identity.

How Do You Freeze Your Credit?

I know. “Go and freeze your credit” sounds intimidating if you’ve never done it before. But Clark estimates it takes just 15 minutes.

“It will give you so much more peace of mind in practice and mentally than signing up for any credit identity theft restoration or anything like that,” Clark says.

Visit Clark.com/creditfreeze and we'll walk you through the simple steps to freeze your credit with Experian, Equifax and TransUnion.

Final Thoughts

Forget paying any amount of money for identity protection. Even less than $40 a year. You probably get some or all of those features from a credit card or two.

Instead, freeze your credit. That will prevent a criminal from impersonating you and using your credit.

This article was originally published on Clark.com

The post Is Identity Protection Worth Buying From My Insurance? appeared first on Clark Howard .