Does Home Insurance Cover Fraudulent Use Of My Credit Cards?
Caeva O'Callaghan | May 11th, 2021
No. Your home insurance will not cover you if your credit cards are used fraudulently by another party. This would count as identity theft, which is a crime.
If your credit cards were stolen, on their own or with other belongings of yours, this is theft in the traditional sense. That would be covered by your home insurance.
In this article, we’ll cover the following questions:
- Is fraudulent use of my credit cards theft?
- Can I claim on my home insurance for identity fraud?
- How can I keep my credit card safe?
To put it in simple terms, you can claim on your home insurance for the cards themselves, but not the money stolen. Contact your bank immediately if you suspect you have been the victim of fraud.
Is fraudulent use of my credit cards theft?
Credit card fraud is identity theft, as the perpetrator is pretending to be you when they use your credit card. Credit card fraud is considered theft, not of money but of identity, as credit card money was never “yours” in the first place. Inform your bank immediately if you think your credit card details have been used fraudulently, as they can cancel your card and make sure your credit amount returns to normal once things have been fixed.
Theft in the traditional sense may also occur if the credit cards themselves, or your credit card details, were stolen from you. For example, if your purse was stolen, or somebody took the credit card out of your jacket when you weren’t looking.
Theft of credit card details online is considered a cyber crime. This happens when your payment details are leaked from a website, or when someone hacks into your network. The organisation looking after your data needs cyber insurance, and your bank should liaise with them to sort matters out.
Can I claim on my home insurance for identity fraud?
No. Standard home insurance does not cover identity fraud, although some providers may include it as an add-on. If identity theft is a particular worry for you, then you need to work with your provider to find cover for this particular instance.
If a thief uses your credit card number to make purchases, or withdraw funds from your account, you’ll have to handle those losses by contacting each financial institution individually. In most cases, a zero-liability policy will be in place to protect you if your credit card or credit card number is stolen.
If applicable, your bank may refund you for any money that has been taken from your account, depending on how quickly you report the incident.
How can I keep my credit card safe?
When this personal information is stolen, an identity thief can take out a loan, withdraw money, create a new bank account or open a new credit card under their victim’s name. This is why it’s good practice to keep all of your personal data secure, especially your credit cards.
Some important tips to consider are:
- Never keep your PIN number with your credit cards.
- Shred bank letters or anything with your credit card number on it.
- Avoid giving your credit card to anyone you don’t trust.
- Review your credit card statements every month, and raise concerns immediately.
A unique danger to credit and debit card fraud is “skimming”. This is when the card is cloned or duplicated with a special swipe machine. To avoid skimming, keep an eye out for suspicious devices on cash machines, or unfamiliar or suspicious looking card readers.
It’s worth noting that if you were behaving negligently, your insurance and the financial institution who provided your card will not refund any lost money. For example, if you left your credit card out in the open in a public place or were otherwise careless.
Talk to our insurance experts with any questions you have regarding home or personal insurance.
To find out more about financial fraud and how you’re covered, give us a call today.