‘Identity Fraud’ Coverage Aids in Expense of Clearing Victim’s Name

Travelers Property Casualty Corp., the No. 3 U.S. property and casualty insurer, said Tuesday that it has launched insurance coverage for victims of identity fraud--the first coverage of its kind.

Identity fraud occurs when a criminal takes someone’s personal identification information, then represents himself or herself as the victim in order to fraudulently obtain money and property.

The new coverage is for up to $15,000 in expenses a policyholder might incur in clearing his or her name and correcting financial records after being victimized by identity fraud, Travelers Property said.

Costs that will be reimbursed include legal expenses, loan reapplication fees, telephone and certified mailing charges, notary expenses and lost wages for time taken from work to deal with the consequences of the fraud, said Robert Nighan, a manager in Travelers Property’s bond division.

Policyholders of homeowners’ or tenants’ insurance can get the identity-fraud coverage for an extra $25 a year, Nighan told Reuters.

The firm said the average perpetrator of identity fraud runs up $20,000 to $30,000 in bills. Victims are generally not liable for bad debts.

Travelers Property is based in Hartford, Conn., and is 83% owned by financial services titan Citigroup Inc.