Should I keep old car insurance policies?
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UPDATED: Jun 4, 2019
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In a world with lots of paperwork and with many of that paperwork having switched to digital files in over the last several years, it can be difficult to know what papers and documents to keep, which ones to throw out, and which ones to shred. Car insurance is no exception to this paperwork dilemma. If you are wondering if you should keep old car insurance policies, you are not alone. If you are wondering if you are paying the best rate you can get on your car insurance policy, you are also not alone. Many people have utilized an online rate comparison tool to help them determine the best auto insurance policy and rate for them. Use one of these calculators today to see if you can lower your car insurance premium. Compare car insurance rates now by using our FREE tool above!
Can I throw out old car insurance policies and documents?
Many Americans are in the habit of saving any kind of important document and paperwork for years. From bank statements to personal letters, and everything in between, several generations of people are in the habit of saving. Previously, these people were very well prepared and organized. However, with so much of our documentation and paperwork switching to digital and electronic forms, the need to save much of what previously was saved has significantly declined. In fact, you may be among a group of Americans surprised to learn that they do not need to save their old car insurance policies.
According to the experts, you only need to keep your current policy declarations and a copy of your most recent policy booklet.
Your declarations explain your current policy and your policy booklet is kind of like a contract between you and your insurance company. Anything more than that is an overkill to keep.
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Proper Disposal of Old Documents with Personal Information
However, be sure when disposing of old documents that you are shredding anything with any kind of personal information on it. Your auto policy and declarations will generally have the following personal info:
- Name, address, contact information
- Make and model of vehicle
- Potentially your SSN
If this information were to go into your trash and not be shredded, it could get into the wrong hands. Use a shredder or a professional shredding service whenever you are getting rid of paperwork with potentially personal or sensitive information on it.
Ways to Save Money on Your Auto Insurance Policy
One reason why you do not need to keep old policies is because they can change from one period to the next. You have the right to make changes on your auto policy any time you choose. Some of these changes may even save you money. Here are some ways you can decrease your auto insurance premium:
- Increase your deductible: Your deductible is the portion you pay if you file a claim. Depending on the coverage type and the car insurance company, deductibles can be anywhere between $50 and $1000. In general, the higher your deductible, the less your premium will be. That is because if you were to file a claim, the car insurance company would have to pay less to repair your damages. The reverse is also true that if you have a lower deductible, your premium will be higher. Before selecting a higher deductible, be sure you have the financial means to pay the full deductible amount if you need to file a claim.
- Drop certain coverages that are not legally required: There are certain types of coverages, such as collision and comprehensive coverages that are not required by law. Depending on your situation and your vehicle, you may be able to drop these coverages. Not paying for them can decrease your auto insurance bill significantly. However, as with increasing your deductible, you should make sure you could pay to replace or repair your vehicle in the event of an accident or another event, such as a fire or a natural disaster. Without these types of coverages, you may be left without a vehicle or with a very large bill. Also, keep in mind that if you currently have a loan out on your vehicle or you lease your vehicle, you are more than likely contractually obligated to keep these coverages current.
- Change cars: Certain types of vehicles can cause your insurance premium to be higher. This can be due to the lack of safety features or a poor safety record. It can also be because certain types of vehicles are at an increased risk for theft and vandalism. You can speak with your insurance company about which vehicles might be more cost effective when it comes to the auto insurance premium you are required to pay. Purchasing an older or less expensive car may help. In addition, statistics show that people who drive flashy cars tend to drive more recklessly than drivers who do not.
- Work on your credit score: While it will not change your premium overnight, working to improve your credit score and history can help to lower your premium. Most auto insurance companies utilize a credit-based score when determining your risk and assigning you a premium to pay. People with excellent or good credit scores will, in general, end up paying less than drivers will okay or poor credit scores.
- Lower coverage limits where you can: There are legally required limits to your insurance policy in nearly every state. However, you may have some wiggle room when it comes to decreasing or adjusting those limits. Doing so may help you to save money on your auto insurance premiums.
Discounts on Car Insurance Premiums
In addition to making adjustments to your auto insurance policy, you can also ask if you qualify for any discounts. Discounts will vary based on your insurance company, however, here are some common discounts:
- Good Student
- Good driver
- Defensive driving course
- Low mileage
You do not need to save old auto insurance policies or documents, only ones that are current. However, when you are ready to shop around for a better premium price on your auto insurance policy, use an online vehicle insurance rate comparison tool. These tools are simple and easy to use and will get you on your way to paying a lower premium in no time. Enter your zip code in our FREE tool below to compare rates now!