How long do I need to keep car insurance policies?

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Here's what you need to know...
  • If you switch companies and have no open claims, or reason for filing a claim with the previous company, you do not need to keep your old policy
  • If you know you will have a claim filed against your previous policy by another party, keep your policy so you can review it
  • If you have a claim that has not been settled, make sure to keep a copy of your policy

You need to keep records of your car insurance policy while the policy is in force. Once the policy expires or you have changed companies, you don’t need to keep a copy of it anymore.

If there are any claims or potential claims against the policy, you will need to hang onto the paperwork until they have been resolved. If you change car insurance companies, then there is no need to hold onto that old policy information.

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Car Insurance Policy in Force

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Your car insurance policy is a legally binding contract between you and your insurance company. As a consumer, you pay your premiums and in return, the insurer agrees to protect you from financial loss.

The policy document outlines the coverage you have in place, as well as the policy exclusions. If you need to make a claim against your car insurance policy, the insurance company will consider it based on the terms of the policy you have in place.

It’s a good idea to keep a copy of this document in a secure location. That way, you can review it before making your claim to make sure that you are including benefits that you are entitled to in the documents you are filing with the insurer.

If the insurance company denies your claim, you may be able to appeal it based on the policy language. The appeal will need to be based on a specific clause in the car insurance contract.

Car Insurance Policy Expires

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If your insurance policy expires and you have switched insurance companies or you don’t need car insurance because you no longer own a vehicle, you can dispose of the old policy. Do keep a copy of the policy the new insurance company has issued to you.

It may be less confusing to dispose of the previous policy anyway. You don’t want to be referring to one that is no longer in force if you are trying to determine what type of coverage you have if you need to make a claim against the policy.

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Open Claims on the Policy

Your car insurance policy protects you from the time the policy is issued. A claim made to repair or replace damaged property can be resolved relatively quickly. Claims for personal injuries are a more complicated matter, though.

A person who has been injured in a car accident wants to be sure that he or she is being fully compensated for:

It may take time to get a complete picture of the level of injuries sustained. If the injured person needs to consult more than one doctor to get a diagnosis and prognosis for recovery, the process won’t be completed right away.

The full extent of the damages sustained by the injured person will take time to determine since it may be not immediately apparent how long they will need to be off work (in the case of a claim for lost wages) or what level of home care assistance they will need and for how long.

Until this information can be determined, the claim will likely remain open.

If the matter cannot be settled between the insurance company and the injured person directly, the injured person may retain an attorney.

The negotiations will continue, and if the matter cannot be settled at that level, a lawsuit may be started if you live in a tort state or the injuries are severe enough to meet the no-fault threshold.

Through this process, you should have a copy of the policy available if you have questions about the type and level of coverage you have in place.

Another situation where you will want to keep a copy of your policy is where you have been involved in an accident but you haven’t been notified of any claims being made against you.

The policy language will spell out what protection the insurance company will offer you in that case, and you will want to confirm the amount of coverage available to you if a claim is started.

The amount of time you need to keep copies of your car insurance policies depends on your personal situation. You will, of course, want to keep a copy of your current policy handy.

If you know or suspect that there is some unfinished business with your car insurance coverage, the wiser choice would be to hold onto the policy document.

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