AOL to offer insurance to subscribers

By Anick Jesdanun

updated 5:50 p.m. ET Sept. 11, 2006

NEW YORK - Free insurance coverage for identity theft and computer damage is among the premium security offerings AOL is making available to its dwindling base of paying subscribers.

The move, which AOL said it would announce to its members Tuesday, follows last month's decision to give away AOL.com e-mail accounts, software and other features once reserved for paying subscribers and remove key reasons for millions of customers to keep paid accounts.

The insurance, offered through American International Group Inc., pledges up to $10,000 to help restore users' identity and credit regardless of how their Social Security number, bank account or other personal information got compromised. The policy covers costs for refiling rejected loan applications, legal fees, credit reports and up to $2,000 in lost wages.

A separate AIG policy covers up to $1,000 to repair or replace computers that suffer physical damage.

But don't spill coffee quite yet: The replacement cost is limited to the computer's current value, not its purchase price. And yesterday's models are always worth less today.

The insurance is limited to subscribers under the $26-a-month unlimited access and $10-a-month broadband plans. It does not apply to the $10 monthly plan with unlimited access but fewer features than the full plan. And New York state residents are ineligible because of state laws, AOL spokesman Andrew Weinstein said.

The policies require no deductible, but are secondary to other coverage, meaning a user's homeowner's or renter's insurance pays first. To activate the insurance, users must first use the firewall and computer checkup tools that AOL is introducing at no extra charge to paying subscribers Tuesday.

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