UPDATED: Mar 13, 2020
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The following is an exported forum post from our discontinued forum. If you would like to reply to this old forum post, please post a comment below.
I switched auto insurance companies back in April (2011)
Is there any reason why I would need to keep my bills from the old insurance company?
I hate holding on to trash, but at the same time, I always file away all important documents (just in case).
I see no reason why I would need to keep bills from my previous insurer. Am I right? Or is there something I’m missing?
In most cases, you should have no issue throwing out old auto insurance bills – especially if they’re 2 to 3 years old and you have already switched insurance companies.
Before you throw out the old bills, however, consider a couple reasons why you might want to keep the bills:
Keep Track of your Policy Number and Coverage
Your old car insurance bills have your policy number and coverage information. You may want to keep this information for future reference.
This might be particularly important if you were involved in an accident under your old car insurance policy. Your car insurance is responsible for covering you at the time of the accident – even if you’re now currently with a different insurer. If someone decides to sue you months after an accident after you have already switched car insurance companies, then you will need to reference your old car insurance policy to make sure you’re covered.
Similarly, if you decide to make a claim months after an incident, then you may need your old policy information. If a branch fell on your car six months ago when you were with a different insurance company, then you might wish to make a claim under your old insurance policy.
Keep Track of Paperwork for Tax Purposes
Some people write off car insurance as a business expense. If you are self-employed and use your truck for landscaping work, for example, then the insurance on your business vehicle could be considered a vehicle expense.
If you are writing off insurance for tax purposes, then you should keep all related insurance information for up to 7 years. In most cases, however, the IRS only requires you to keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. You are only required to keep tax documents for 7 years if you file a claim for a loss from worthless securities or bad debt reduction. You can learn more about IRS rules for self-employed individuals here.
Keep Car Insurance Info for 2 to 3 Years to Cover the Statute of Limitations
Statutes of limitations vary between states. Generally, however, a claim for personal injuries from a car accident needs to be filed within two years, and property damage claims need to be filed within three years.
With that in mind, we recommend keeping old car insurance documentation for 2 to 3 years to ensure you’re protected.
Switch to Paperless or E-Billing
We recommend switching to paperless or e-billing to better organize your car insurance documentation. In general, you will never need your old car insurance payment paperwork if you are not involved in an accident and not preparing to be sued. However, you may not your old car insurance paperwork for 2 to 3 years if you are writing off car insurance for tax purposes.
It’s may work best if you have this information – like your policy number, payment amounts, and payment dates – organized in your email inbox instead of as physical documents. It makes everything easier to store. You don’t have to worry about clutter.
Ultimately, there are only a few reasons why you might want to hold onto old car insurance paperwork:
- If you want to file a claim with your old insurance company, then your old insurance company may be required to pay any damages incurred at the time you were insured with that company
- If another driver files a claim against you (say, if you were the at-fault driver in an accident), then your old insurance company may still be required to cover you in this situation (most states have a 2 to 3 year statute of limitations for situations like this)
- If you write off car insurance for tax purposes, then the IRS may require you to keep this documentation for 2 to 3 years after filing and paying your taxes (or up to 7 years for certain claims)
If none of the above situations concern you, then feel free to toss your old insurance paperwork in the garbage. If you do throw away your old paperwork and end up needing it for the above situations, then you should be able to contact your old insurance company and recover your policy number, payment information, and other data at a future date. Enter your zip code below to view companies that have cheap auto insurance rates. Secured with SHA-256 Encryption
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There are a couple of reasons you might want to keep your insurance bills.
Like what our admin informed about the importance of keeping it thinks at the end of the day it is better to keep them on your files to track your payments and can be helpful in the long run.
It will be nice if you maintain an record for all these payments, because in case of any dispute it will help to prove that all the payments are done on time.
maintain your records so you can track your expenses over the years, it can be usefull when you’re doing you’re annual shopping around.
The only reason you should keep your insurance bills :
If you believe you could fill a claim for a loss that happened when you were insured with this company. If by any chance you discover something broken on your car and you think it happens before you switched to another company, your claim will be with your ex-insurer.
Let’s say you had a minor accident and you didn’t claim anything. Maybe the other driver involved will declare the accident. You will then have to manage the situation with the company that was insuring you at the moment of the accident.
Your coverage doesn’t follow as you switch companies. The moment of the loss is the primes. Even if the claim is fill years later.
I agree with the admin, it’s important to save your insurance paperwork for your records.
If it’s just the clutter and excess of paper that is bothering you and you have yet to go paperless – try scanning them to your computer so you can start keeping electronic records.
Be wary that your hardrive could also fail, so backups are recomended (in paper or electronic form).
For me, it wouldn’t be a bunch of trash but a bunch of “emergencies” reference. Might something happen, we don’t know could it be a big HELP!