Buying any form of insurance is really all about the numbers. The same is true for life insurance, health insurance, car insurance, and yes, even identity theft insurance.
When you purchase insurance, you’re making a calculated decision. You’re betting, essentially, that a given peril (such as having a car accident or being victimized by identity theft) may in fact happen to you (although you’re hoping that it won’t).
The insurance company that sells you the insurance is making a bet too. They’re betting that the danger or peril in question won’t, in fact, happen to you (and they’re hoping it won’t also). At the very least, they’re hoping that a specific danger won’t happen to too many of their insured clients.
Despite the odds of something happening, insurance companies know that in any given year, for any type of insurance, they’re going to pay out a certain number of claims.
The two big questions really are: who will file a claim and how much of a payout will that person be seeking? When it comes to identity theft, it’s almost a crapshoot on that first question.