When to toss your old insurance policies


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It’s common to hear people talk about living in a “paperless society.” It’s a little harder to believe it when you look around and see how much paper we all hold onto in our offices and homes. Some of that paperwork may be necessary for tax or other purposes. But is that true for all of it? For example, how long should you keep car insurance statements? In this report, we’ll take a look at what you need to keep, what you can afford to toss and the best way to handle all your paper stacks.

Documents that you need to keep

Even though we do much of our business electronically, there are still a few cases where you should keep physical paper copies of documents. Of course, very important papers — passports, birth certificates, wills and more — should be kept indefinitely. Those documents should be held in a fireproof, waterproof location such as a safe or lock box.

But what about all those insurance documents — car, life, homeowners, umbrella and maybe more. Do they all need to be saved? Some of them should be saved for at least a short while:

  • Your car insurance card. This easily fits into a wallet or glove compartment, and should be kept with you. In some states, you are required by law to have it in your car. If you are stopped by the police, they will request it. You will also need it if you have an accident, since it contains your policy number and other information you will need to exchange with the other driver.
  • The declarations page of your policies. You will receive this page along with your other policy documents when setting up a new insurance policy or when renewing it. It has your name and address, policy number and, most importantly, a summary of your policy’s coverage. Keep this in a safe place as long as it is valid.
  • Documents pertaining to a claim. If you have an open claim with your company, keep all receipts, repair bills and any other paperwork pertaining to the claim. They can be disposed off once you have received a check and the claim is officially closed.

Documents that you do not need to keep

  • Your main policy document. This is the multi-page document that includes all the details about your policy limits, discounts, coverage, endorsements and more. Many people hold onto these pages until they renew their policy — and that’s fine. But it’s not really necessary since most insurers offer digital access to these documents through your account at the company’s website. If your insurer does not have this functionality, hang on to them until you receive a new one in the mail when you renew. How long should you keep insurance policies after they have expired? Those can be discarded immediately.
  • Cancelled checks from paid premiums. Many banks no longer return your cancelled checks. If yours does, you can shred the checks once you have reconciled them with your account.
  • Your monthly account statement or billing statement. If you still receive a paper statement from your insurer each month, there’s no need to hang on to it once you’ve paid it — unless you’ve used your car or home for business purposes, in which case you should keep a year’s worth of statements for tax purposes.

How long to keep insurance records

If you are wondering how long to keep car insurance records, the answer is usually one year or less, or for as long as they are valid. If you still have the documents, for example, for a car you no longer own, these can be safely discarded. The same holds true for any policy that is no longer active.

You will usually receive a new set of policy documents annually, or in some cases semi-annually. Once you have received these, the old ones are no longer necessary. It should be standard practice for you to file the new copies at the same time you take out and discard the old ones.

If, for some reason, you accidentally discard current policy documents, don’t worry. Your insurer will have copies of all paperwork on file, and you may be able to access them online. A quick call to your agent should be enough to be issued a new copy to replace the discarded one.

The one exception to this rule occurs if you have a claim that is still open, even if the policy has ended. For example, if you are in an accident with your 2018 Toyota Corolla that included medical costs, it may take several years for all the medical bills and invoices to be settled. In the meantime, you may have sold the car and closed the account. To be on the safe side, keep your policy documents until you are sure there will be no more costs applied to the claim.

How to properly dispose of old insurance policies

It’s a good idea to shred your old insurance policies. Small home shredders can be purchased for less than $100. Office supply stores such as Office Depot and Staples offer shredding supplies and services, and some municipal regions have regular shredding days where you can bring your documents to a central location for disposal.

Identity theft is a real fear for many people, and rightly so. Your policy documents may contain names and addresses, policy numbers, even passwords, and an enterprising thief may use them for personal gain if they’re found in the garbage or a dump site. In general, you should always shred (or burn, if you have access to a fireplace) anything that has your name or any identifying details on it.

Frequently asked questions

What is the best auto insurance company?

Although there is no one “best” auto insurance company that works for everyone, we’ve collected the companies that offer the best prices, most comprehensive coverage options and superior customer service on our Best Auto Insurance Companies for 2020 listing. A good place to start your search for car insurance would be to get quotes from these companies.

Can I throw away old insurance policies?

Yes, they can be thrown out if: 1. You receive your new documents in the mail, 2. you close out the policy, or 3. you are able to access the documents online. If any of these conditions are true, there is no reason to hold onto the old policy documents.

How should I store documents that need to be saved?

There are several options here. If you need to store paper copies, a small, portable, fire-safe lock box is a great idea. Don’t store it in your basement, in case your home experiences flooding. You may also want to consider off-site electronic storage in the cloud or on a flash drive or other storage device. For a small fee, sites like Dropbox and iCloud will store your electronic documents safely, and be accessible no matter where you are or what device you’re using.