Personal Identity Insurance: Coverage and Pricing in the U.S

Personal identity theft occurs when a criminal uses stolen personal identifiers to manipulate third parties into taking actions under the false belief they are communicating with the individual whose identity has been stolen. A typical example is the criminal taking a loan out under the stolen identity. A market for personal identity insurance has emerged to mitigate the associated harms. We extract 34 personal identity insurance products that were uniquely filed with regulators in the U.S. We conduct a content analysis on the policy wordings and actuarial tables. Analyzing the policy wordings reveals that personal identity theft causes a number of costs in terms of monitoring credit records, lost income and travel expenses, attorney fees, and even mental health counseling. Our analysis shows there are few exclusions related to moral hazard. This suggests identity theft is largely outside the control of individuals. We extract actuarial calculations, which reveal financial impacts ranging from a few hundred to a few thousand dollars. Finally, insurers provide support services that are believed to reduce out of pocket expenses by over 90 percent.