How insurers profit from fears of identity theft
Insurer profit from identity theft
The insurance industry has grown for decades. Every problem has an insurance answer. We insure our homes, lives, automobiles and now our identity. These professional gamblers examine the problem and believe their insurance product can bet the odds. Now insurance companies sell insurance policies against identity theft.
Insurance Company Operation
The insurance industry operates as organized gambling. Underwriters determine the risk and if the risk is low, the company grants an insurance policy. The intention remains to pay out no more than the person paid in premiums for the insurance policy. The company offers peace of mind as there product. If the risk were low for the insurance company, would the risk remain low for policyholders as well? Is feat proving profitable?
Identity Theft Scenario
A health card insurance card arrived in the mailbox, but did not get in the house. The thieves took out the health insurance card and identified the social security number as the account number. The thief applied for several credit cards and received substantial balance because of past good credit. The thieves enjoy a shopping spree. A furniture store denies application for credit because of a default on a credit application. A credit review determined the defaulted accounts were not yours. You began the fight to right the wrong. At the same time, insurance companies were advertising their new product. With the insurance if you identity theft is stolen the insurance company works to restore your identity and compensate you for any expense. What is their gamble?
Profit Factor
Much information is out to train citizens how to avoid identity theft. There are locks to the mailboxes, information on how to avoid phishing emails and protection of our credit cards in the markets. One risk remains social security cards remain at home, as recommended but many Health Insurance Company and Medicare use the Social Security Number as account number. Try checking into a hospital or doctor’s office without your insurance card. The doctor’s office will not take the risk and you will end of paying the bill and chasing down a reimbursement. All true risk remains with the individual.
Everyone has a story of himself or herself or a friend who had to fight identity theft and the fear grows, but has the education minimized the fear enough for the insurance companies to offer a product. Could we accomplish the reimbursement for ourselves? The insurance company compensates the individuals for their loss, then works for reimbursement, and receives reimbursement for their expense.
Insurers and insurance companies profit from fear of identity theft.
