Identity Theft Insurance aim to provide victims with reimbursement for all expenses they encounter as they restore their identities and clean up their credit reports. The financial cost of identity theft to anyone is undeniably high that an average individual would have to keep a frugal life for quite a number of years in order to pay-up everything that's erroneously done by someone else. The insurance policy will cover all expenses while the victim restores his or her identity such as credit report copies, phone bills, lost wages, notary and mailing costs, and attorney's fees. On the average, identity theft insurance costs a maximum of $200 annually with around $20,000 coverage. This is usually sold as an add-on to homeowner's insurance but can also be bought separately.
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In a macro view, identity theft insurance gives anyone the peace of mind knowing someone will cover any possible financial damage the crime can cause.
Now let's review the coverage details and see how it impacts a real victim's journey to regaining his identity.
An individual is not held responsible for debts caused during identity theft situations, however, he or she should be responsible for cleaning the damage to his or her name and credit standing. The individual should be the one responsible for monitoring his or her credit reports, bank accounts and statements. The individual, more often than not, would have to be off from work to process his or her documents. While the policy can reimburse maximum of $2000 due to lost wages for the days he or she fails to report for work, consider the fact that restoring someone's identity takes up time - a lot of it. Two thousand dollars could be equivalent to an average individual's 60-day salary, a time range that may not be equivalent to the time that will be spent for the entire restoration process.
It is also important to note that identity fraud insurance only covers theft via credit fraud. If the thief committed common law violations, driving offense for example, the insurance policy does not apply. If a home insurance pays for the repair of one's home, id theft insurance will not pay for the repair of one's credit record or clear one's criminal report. The individual would have to do these on his or her own.
It's very helpful that the policy can cover cost for certification of documents, notary, and phone calls. Insurance also offers big reimbursement for attorney's fees. However, while lawyers will be of very good help, an ordinary identity theft case doesn't really need lawyer's full services other than notarization of documents.
Therefore, the coverage policy may not be at all useful for average identity theft victim. Certainly nobody would wish to be involved with extreme cases just to use up the $15000 allotment for legal fees.
Prevention is still the best step to take in fighting identity theft, but if you would want that peace of mind, identity theft insurance may be a good decision. Just ensure that you know the very details of your policy.
A Power of Attorney (POA) is either limited to a specific transaction and called a Limited Power of Attorney (LPOA) or is not limited to a transaction and is called a General Power of Attorney (GPOA). It is common in real estate transactions to use a LPOA for the day-to-day administration of the activities of the property and for signing the closing documents when the property is sold.
The usual reason for the owner of a property to give a POA to someone is because he can't be onsite where the property is located or can't come to the closing. Even with a LPOA the person given this power can issue the disbursement check to himself which makes POAs risky if the authorized agent takes advantage of the situation.
Attorneys are so aware of this issue that they will seldom allow a client to give them a POA even for just signing closing documents. There is always the potential liability that the grantor of the POA has a flash of hindsight and blames the administrator of the POA for doing something wrong or not enough of the right thing.
A POA is a flag for attorneys and should be for any investor going to a closing where the actual seller isn't signing the closing docs for a couple of reasons. I know there are legitimate reasons for a power but generally they cause more problems than they solve. First, the grantor of the POA can revoke the LPOA at any time and you have little or no recourse with the person you are dealing with.
It is likely you wouldn't know it has been revoked until well after you close. POAs are frequently fraudulent or so says the person who is supposed The original source to have signed them. Despite the POA being filed in the public record after the closing, it can still lead to agony if it is claimed to have been cancelled or is actually fraudulent. Think about what happens if you rehab a property and within the statute of limitations (3 - 7+ years), the original seller comes back and says the transaction was fraudulent. Your title insurance may cover some of you loss but it depends on the "Exceptions" that were written into the policy. You will not be reimbursed for the repairs you made.
While it is more common to find fraudulent Quit Claim Deeds but POAs are as easy to fake. Usually, POAs do not require two witness's signatures or even a Notary signature in some states. POAs also expire automatically if the grantor passes away. Closing agents have all the rights in the world to get "nervous" when they hear a party is coming to closing using a POA. What we do is to have the original seller sign anyway and do this by having the documents mailed or delivered to the seller for signing and notarization.
In summary, whenever a POA is used for any reason, be skeptical. The deal may be very lucrative, but if it sounds to good to be true don't be overcome by greed. I actually use a finger print card for the seller when a POA is involved. The ink for the card is also designed to get a sample of the person's DNA so there can never be a question of who signed what. When I show the fingerprint card to the signatory on the POA their attitude usually changes dramatically and they cooperate in getting the original seller to sign the closing documents.