When you sign up for a new auto insurance policy, you receive a large envelope full of booklets, pamphlets, and papers. Going through each and every piece of paper can be difficult because the average person doesn’t really understand the insurance lingo that’s used within the contract and on the policy declaration’s page. Even so, all of the paperwork you’re sent at policy inception is important, and you need to keep it until it no longer serves a purpose. Compare car insurance rates now by using our FREE tool above!
If you’re the type of person who likes to hold onto documents just in case you might need them, you could easily pile up counters, tables, desks, and files cabinets with all of the invoices and mail that you receive each year. This is why it’s important to go through old documents and clean out the outdated files that you’ll never really need to reference. As you’re going through your records, you might be perplexed as to when insurance records are considered shred-worthy. Here’s a guide to help you minimize the clutter without throwing out pertinent documents.
The Declarations Page
Perhaps the most important document that you receive when you buy coverage is the declaration’s page. This is the only document that includes information on what’s insured, who’s insured, when the property’s insured, how much the property is insured for, and how you’ve been rated as a policyholder.
It’s the one official document you’ll receive that shows not just how much you pay in total, but how much you pay for every coverage you’ve selected.
Every time you make changes to your policy you’ll receive an amended declaration’s page with the new details and the new pricing breakdown. If you make even just a few minor changes each term, you’ll have piles of amended documents and envelopes in a matter of just a few policy periods.
When is it time to trash the declaration’s page?
If you want to conquer the clutter, you’re free to shred your old declaration’s page as soon as your new policy renews. There are some exceptions to the rule, but typically you can throw out your insurance policies once every year. Since the coverage has renewed under a new policy term, the old term documents aren’t really relevant.
When are there exceptions to the one-year rule?
There a few instances where you may actually need your declaration’s page for longer than just 6 months or a year. Before you toss the paperwork or slip it into the blades of a shredder, you should think about your own personal situation. Here are some scenarios where having a past declaration’s page can be handy:
- You’re Claiming Insurance Premiums When You File Taxes
If you’re self-employed or you’re an independent contractor, you might be eligible to write-off some of your monthly expenses when you file your taxes. For contractors and business owners who use their personal vehicle for business, writing off things like mileage and auto insurance expenses is an option.
To support your filing, you should always have a copy of the premium costs so that you can deduct a pro rata portion of your expenses based on your usage. Keep the declarations page in your tax file until it’s time for you to shred these files. Most experts recommend keeping your tax records for 3 years.
- You Have a Pending Claim to File
If you have a claim to file and your current term has ended, it’s best to keep your old declaration’s page until the claim is settled. Since the claim is filed against an old term, you can see which coverage options you carried at the time the loss occurred. The insurer will also have this on file if you’ve already discarded the documents.
- Proof for Prior Insurance Discount
If you’re going to switch insurers, it can be very helpful to have old declaration’s pages on hand. Many companies ask if an applicant has insurance and how long they’ve been insured with a carrier to rate a policy. The prior insurance proof gives you experience and prior insurance discounts. Old declaration’s pages might tell you when your policy originated if you don’t remember.
Auto Insurance ID Cards
In most states, drivers are required to carry auto insurance ID cards with them at all times when they’re driving a vehicle that they own. Failing to carry the ID cards with you can land you in court presenting proof and paying a fine. ID cards can be disposed of when the term ends or when you no longer own a vehicle.
The Personal Auto Policy Booklet
In addition to your declaration’s page, you’ll receive a Personal Auto Policy agreement when you sign up for insurance. You’ll also receive another booklet when there are amendments made to the insuring contract that you should be aware of. You can dispose of a policy booklet when you receive a new updated version of the form. Keep the most up-to-date agreement so that you can reference it if you have questions about policy terms, conditions and provisions.
Alternatives to Keeping the Physical Documents
If you were already shred-happy and you disposed of documents that you need, there are ways to get the information that you need. Here are some solutions to store your documentation or to access it once it’s gone:
- Contact your prior insurer to request a Letter of Experience as proof of coverage
- Ask your old carrier to fax a declaration’s page for tax filing
- Store electronic copies of your dec pages and old claims forms in your computer
- Use cloud-based storage so that you can keep your insurance records for access anywhere
You don’t need to hold onto every for 5, 7 or 10 years. It’s okay to get rid of ID cards, invoices, and even declaration’s pages when they are outdated. If you’re interested in shopping for auto insurance coverage, get your most recent dec page out and start to compare premiums. Use an online auto insurance premium comparison tool to retrieve multiple quotes at once. Once you compare the costs, you can activate a policy and file those documents. Enter your zip code in our FREE tool below to compare car insurance rates now!