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Travelers Property Casualty Corp. launched a novel insurance policy Tuesday designed to protect consumers from identity fraud.

For an extra $25 a year on a Travelers homeowner's or tenant's policy, consumers can be reimbursed up to $15,000 in expenses they might incur as a victim of indentity fraud. The rider covers attorney fees, loan reapplication fees, telephone and certified mail charges, and lost wages for time off work to deal with the problem.

Customers who pay for homeowner's insurance through their mortgage would pay an additional $2.08 a month for the coverage.

Identity fraud involves obtaining personal information, such as a name, address, Social Security number and date of birth, to run up bills in another person's name or commit other financial crimes.

Based in Hartford, Conn., the insurance company, a division of Citigroup, is the first in the industry to offer coverage for identity theft, according to the Insurance Information Institute.

Other insurance companies probably will offer similar protection, a spokeswoman for the institute said.

Travelers launched the product Tuesday in New York, Pennsylvania, Maryland, Virginia and the District of Columbia. and is expected to add other states within a year.

"Travelers recognizes that identity fraud is a crime that victimizes more and more American consumers every day," said Edward Charlebois, a vice president in the company's personal lines division.

The Privacy Rights Clearinghouse, a non-profit consumer information and advocacy group in San Diego, estimates that more than 400,000 Americans will be vic
tims of some form of identity fraud this year.

"Here in Buffalo, we have this happen all the time," said Special Agent Paul M. Moskal, spokesman for the Buffalo office of the FBI, adding that the criminals often come from other states or countries.

"With the onset of technology comes the ability to commit crimes from great distances," he said.

Savvy computer users can find any individual's address, Social Security number and date of birth, as well as credit card numbers and driver's license numbers over the Internet, Moskal said.

Some fraud victims never know that they have a problem until being denied a loan because of bad credit reports or getting calls from collection agencies.

Federal law protects victims from all but $50 of losses from stolen credit card or bank information, but consumers foot the cost of straightening out the mess.

"The real expense is your time," said Beth Givens, director of the Privacy Rights Clearinghouse. "You may need an attorney. You are going to have to send a lot of items by certified mail, and you may have to have fraud affidavits notarized at $10 a pop."

Most victims spend at least a day or two off work making phone calls to credit reporting agencies, and some people need a whole week off to clean up the mess, Givens said.

The Travelers policy covers wages of up to $500 a week for four weeks.

"In developing this new protection, we researched reports on actual cases of identity fraud. This allowed us to create insurance coverage for the types of expenses that identity fraud victims commonly face in the process of restoring their credit standing," said Robert Nighan, a manager in the bond division of Travelers.

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