In an age when many prefer plastic money to the paper variety, it makes sense to insure your credit card against theft. The misuse of stolen cards can range from making purchases at shops, online transaction or cloning (where your card is duplicated). Banks and card issuers have stepped in to provide some relief to those affected.

In-built insurance: Several banks offer protection to cardholders against misuse of credit or debit cards. Typically, the service is extended only to the premium category of cardholders. For instance, HSBC bundles a cover with its premier credit card. "The cardholder is insured for Rs 3 lakh against expenses incurred on his card 24 hours before reporting the loss," says an HSBC official. There is no premium charged for this insurance and the cover is in-built into the card. Others such as ICICI Bank, HDFC Bank , Axis Bank also offer zero-liability protection to select customers.

This facility, which comes at no extra cost, promises reimbursement for fraudulent purchases made on a stolen debit card at point of sale terminals. In most cases, ATM and online transactions are not covered. The extent of the cover, depending on the bank, ranges from Rs 1-2 lakh. Insurance companies: Tata AIG General Insurance offers a wide suite of products, which includes identity theft and fraudulent charges cover. "For instance, if a fraudster obtains a credit card by impersonating you and runs up a huge bill, which you have to clear, this policy will cover the loss," says Gaurav Garg, MD and CEO, Tata AIG General Insurance.

Under the other policy, which specifically insures you against the misuse of credit or debit cards, the protection is extended for up to 12 hours prior to reporting the loss. The maximum sum insured under the identity theft cover is Rs 2 lakh, with Rs 290 being the annual premium. The fraudulent charges cover costs Rs 170 a year for a sum insured of Rs 1 lakh. However, fraudulent transactions involving cash advances are not covered. Specialised covers: This apart, over the past few months, several banks like Citibank, Axis Bank, ICICI Bank and HSBC have tied up with CPP Assistance Services, a consumer-services provider, to offer specialised covers.

For availing of the scheme, you have to register your cards with your card issuer. Alternatively, you can also approach CPP directly. In the event of your card being lost or stolen, you need to inform CPP through its toll-free number. The scheme is issuer-neutral, which eliminates the need to intimate the individual banks of the loss. "Depending on the plan selected, the cover could go up to Rs 1 lakh prior and Rs 20 lakh post-intimation. The cover is provided through a group insurance policy from Bajaj Allianz," says Gagan Maini, CEO, CPP. Annual fees range from Rs 995 to Rs 1,295. CPP's scheme does not cover online frauds; it comes into play only if the card is lost or stolen.

Also, under its basic variant, the maximum cover pre-notification amounts to Rs 50,000 (Rs 1 lakh in case of the premium plan). This means that if the fraudster runs up a claim of Rs 2 lakh before you are able to notify CPP, you will be compensated only to the extent of Rs 50,000 (or Rs 1 lakh depending on your plan).

Source: http://economictimes.indiatimes.com/