Americans willing to pay for a personal information protection insurance plan expect to pay $88 annually, according to an online survey by graduate student researchers at Boston University.
The researchers link the public’s rising concerns over information security to increased media coverage of identity theft and recent security breaches at national data centers.
“Experts estimate that $53 billion is lost annually to identity theft,” says student researcher Joshua Storch. “Our goal was to see if consumers realize the risk this poses to them. From our survey, it’s clear they do.”
Through an online survey of 1,049 US adults, the students found that more than four in five of Americans agree that identity theft “is a major problem in the United States.” Nearly a third – 31 percent – are very concerned that they could be a victim of identity theft in the next five years.
When offered the option to pay for an insurance policy that would take care of their credit history, bank accounts and credit accounts in the event their identity was stolen, 72 percent indicated they were willing to pay at least something.
How much people are willing to pay varies dramatically. While the average among would-be payers was $88 a year, half the population was only interested in contributing $50 or less for their own protection. A scant few, or 22 percent, were willing to pay $100 or more a year. These most willing purchasers were young professionals with average incomes of $45,000 and above.
Willingness to pay comes as good news to companies developing exactly this kind of insurance plan, but the low dollar amount may not be sufficient to cover the cost of cleaning up after someone’s identity has been compromised.
RelyData, LLC, a Chicago-based firm that offers identity restoration services, for example, works directly with employers to offer its resolution services as a corporate benefit – keeping the cost reasonable while providing effective coverage. Garnet Steen, president of RelyData, explained, “While credit reports and monitoring could be purchased for around $100 per year, these are merely notification services, and do nothing to help a victim of identity theft remove fraudulent entries in their records and restore their identities. Identity restoration may cost more than monitoring but provides far greater benefit.”
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