Some people get tired of having too much car insurance paperwork in their home or office and wonder, “Should I keep insurance statements?” and “How long should I keep insurance statements?”
There is no right or wrong answer. For example, you may keep the car insurance statements for years and not need any of them. On the other hand, you might throw away your insurance papers and receipts and then have to find them again when the IRS or your insurance company audits you for a claim.
Therefore, you should consider the matter carefully before deciding how long to keep your car insurance records. What works for you may not work for someone else. Things to remember.
Having a complete record of your car insurance documents is important for managing claims and proving you had valid coverage if necessary. But at some point, those old insurance statements and policy jackets start piling up. So when can you shred the paperwork and remove outdated PDFs from your Google Drive?
Our guide explains how long you need to keep different types of car insurance documents, as well as the best practices for storing and disposing of them properly.
Why Keeping Records Matters
There are a few key reasons to hold onto your car insurance records, at least for a set period of time:
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Active policy documents prove your current coverage. Your insurance ID card and declaration page show the types of coverage and policy limits you have in case you need to file a claim or provide proof of insurance. Police officers can request to see your insurance card after an accident or traffic stop.
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Closed claim documents help support your case. If your insurance claim ends up in dispute, having supporting documents on hand like accident photos, repair estimates and receipts will be key.
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Tax purposes may require retaining business auto insurance records longer Check with your accountant on document retention if your vehicle is used for a business or work
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Old policies provide a coverage history. While outdated policies are obsolete, they can demonstrate that you’ve maintained continuous auto insurance over the years if necessary This may assist you when switching companies.
Car Insurance Documents to Keep
Here are the key car insurance papers you should retain, either physically or digitally. The recommended retention period depends on your specific circumstances.
Insurance ID Card
- Retain: Until the policy term expires
- Why: Provides proof of your current coverage when requested by law enforcement or after an accident
Declarations Page
- Retain: Until the policy term expires and all claims are settled
- Why: Details your coverage types, limits and vehicle information
Billing Statements
- Retain: Until reconciled and payment processed
- Why: Shows your payment history and helps resolve billing disputes
Claims Documents
- Retain: Until the claim is closed and settled
- Why: Supports your claim with evidence like photos and repair receipts
Prior Policies
- Retain: 1 year after expiration
- Why: Demonstrates prior insurance history if needed
How Long Should Records Be Kept?
Many car insurance documents only need to be retained until the policy expires or you renew, typically every 6 to 12 months. However, if you filed any claims during the policy term, you should keep all documents until those claims are fully closed and paid out. This ensures you have the paperwork to back up your case.
Let’s look at some common scenarios to help determine appropriate document retention periods:
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You renew your annual auto policy every January 1st and had no claims – Keep the expired policy documents through the end of that year. When your 2025 policy renews, you can shred the 2024 paperwork.
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You have a car accident in March that resulted in a claim that is still pending resolution by your insurer in June when your policy expires. In this case, keep all documents related to the claim until it is officially closed and paid out.
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Your car is used for business purposes. Check with your accountant or tax advisor, as auto insurance documents may need to be kept for up to 7 years for tax purposes.
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You switch insurance companies and the new insurer requests proof of prior coverage. Having documentation demonstrating continuous insurance for several years could help secure a better rate. Keep old policies as long as they provide value.
Best Practices for Document Retention
How you store and handle old car insurance documents is also important for information security:
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Keep papers in locked, fireproof, and waterproof storage. A safe deposit box or firebox can help protect important records.
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Scan documents to digitize records and retain electronic copies even after shredding hard copies. Store scans on an external hard drive, cloud storage, or encrypted flash drive.
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Use a cross-cut shredder (Level P-4 or higher) to destroy documents with personal information before disposal. This helps prevent identity theft.
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Remove outdated car insurance cards and policy documents from your vehicle glovebox when they expire to avoid confusion.
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Check your state’s laws, as some establish minimum retention periods for certain insurance documents.
By properly retaining only active, relevant car insurance records, you can reduce clutter while still being able to furnish necessary policy documentation. Just be sure to hold onto any documents related to pending claims until final resolution. With an organized system, you’ll know exactly where to find the records you need.
Frequently Asked Questions
How long should I keep car insurance policies?
Keep your current car insurance policy documents until they expire, which is typically 6 or 12 months. Once you renew your policy or switch providers, you can discard the old paperwork after about one year. Exceptions include open claims or business usage requirements.
Do I need to keep insurance ID cards after a policy expires?
No, you should remove expired insurance ID cards from your vehicle. The card proves you have active coverage, so it’s obsolete once your old policy term ends. Only the new ID card for your current policy is valid.
Can I throw out a policy if I’m still disputing a claim on it?
No, never discard car insurance paperwork when you still have an open claim. Keep all documents related to the claim until the issue is 100% resolved and payments have been received. This provides evidence to support your case if needed.
How long do insurers keep records themselves?
Insurance companies are required to maintain policy documents and claim records for a minimum period, often 5 to 10 years. But you shouldn’t rely on your insurer to keep all paperwork. Maintain your own organized insurance records instead.
What’s the best way to destroy old car insurance documents?
A cross-cut shredder provides the most secure way to dispose of records containing personal information. Straight-cut shredders or ripping up documents by hand still leaves them vulnerable to fraud. Take precautions when trashing your old insurance paperwork.
Following sound document retention and organization practices allows you to prune unnecessary paperwork while still preserving important active insurance records. Check your state’s specific laws and maintain at least 1 year of prior policies. For open claims, retain every related scrap of paper until the case is closed.
Keep Your Auto Insurance Statements as Long as You Need to
How long you keep your auto insurance statement will largely depend on your situation. You don’t need to keep your statements around if, say, your policy is no longer in effect and you haven’t filed a claim. Still, if you take your car insurance costs out of your income to lower your taxes, you need to keep your statement for seven years.
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When should you keep insurance statements for tax purposes?
Sometimes, the IRS may review your accounts or financial information to determine whether you reported your taxes correctly and whether the amounts you paid match the reported values. That is known as a tax audit. And it can examine documents from as far back as three to six years. So, to be on the safe side, it would be best to keep your auto insurance statements for seven years.
However, not everyone should feel obligated to keep seven-year auto insurance records. This paperwork is only important if you want to lower your taxable income by taking your car insurance premiums out of your gross income.
However, not everyone has the right to do such a thing. Usually, people who use their cars for business can deduct part or all of their auto insurance premiums from their income as business expenses for tax purposes. Also, suppose you are a qualified performing artist, reservist in the armed forces, or local or government official who gets paid on a fee basis. In that case, you can deduct car insurance expenses.
Because of this, you don’t have to keep your auto insurance statements for seven years if you don’t take the premiums out of your income.