Maintain your insurance documents until any claims are settled – this applies for car, home and business policies alike.
Claims-made insurance policies must be kept for an indefinite period (or until their tail period elapses), while liability policy claims may arise even long after its term has ended. Therefore, both should remain active.
Home insurance
Homeowner’s policies typically renew annually, so it is wise to store any documents related to claim-related documents (i.e. repair receipts and insurance company statements) until their new counterpart takes effect. Furthermore, these papers should be stored securely such as a fireproof safe or vault.
Over recent years, it is increasingly common for homeowners to see their rates significantly increase at renewal due to factors like natural disasters and costly claims; labor and construction cost increases; inflation driving up material costs; etc. If your rates don’t reflect what’s acceptable to you, switching insurers or getting your mortgage lender to purchase force-placed insurance might help alleviate them.
Keep all canceled checks from premium payments as these can help to track payment history; once reconciled with your account, they can be safely discarded. Furthermore, keep any documents relating to current coverage periods; usually six months to one year is enough time before expiry and they should be discarded accordingly.
Some individuals keep policies for tax reasons. When doing this, it is wise to consult with a professional accountant. According to IRS regulations, insurance records should be kept for at least seven years.
Many insurance agents employ formal record retention systems in place to keep policies and other client documents organized, making it easy for them to find what they need when needed. Such solutions could include cloud-based digital storage solutions. It may also help storing them in climate-controlled conditions to prevent mold or fade over time. No matter which way you store your documents, be sure to use a cross-cut shredder in order to protect privacy by eliminating risk from identity theft or potentially falling into the wrong hands.
Car insurance
Car insurance policies usually last one year. When switching insurers or renewing, it may be advantageous to keep all relevant documents from your old policy until your new one begins, especially if there are outstanding car claims to resolve.
However, most people only need to keep the main policy documents containing coverage limits, coverage details, discounts and endorsements until their renewal policy arrives in the mail or can access these documents online through their insurance provider’s website. Once their new car policy has been received and signed over to them, their original documents can then be safely shred or digitally recycled as necessary.
As anyone who drives their vehicle for business purposes knows, commercial auto insurance is an absolute necessity. While personal car policies provide ample protection for leisure driving activities, having additional commercial coverage provides extra peace of mind. Business owners can use a separate policy or even buy multiple vehicles and insure them all under one business name if using multiple cars to conduct company related activities.
Businesses typically maintain policies for six years or longer than homeowners or car insurers, since many policies, like business auto, are occurrence-based liability protection against unexpected events that take place both inside and outside their premises.
Even though you can cancel their policy at any time, most drivers change car insurers before the term ends or renewal time. Sometimes a refund from insurance providers may be available; so it might be wise to hold onto expired policies until all pending claims have been resolved.
As with all paper documents, it is vital that they be stored safely, such as in a climate-controlled environment, which will protect them from mold growth and environmental hazards that could deteriorate them over time. Furthermore, documents with sensitive information should always be shredded before discarding them for recycling purposes or disposal; identity theft remains a serious threat and someone could use your personal data from outdated policies lying around unattended.
Business insurance
Business insurance policies can be invaluable, and it’s essential to keep them on file even after their policies expire. They provide essential documentation and information needed for claims made later; HMRC compliance audits may even request them. Having such coverage also protects your finances against lawsuits that might come your way. It is, however, vital that records remain organized and secure.
Historical insurance documents may be time-consuming and tedious to keep track of, but their value in preventing potential disasters cannot be underestimated. One manufacturing company was sued over damages caused by products sold over two decades prior and could only defend itself successfully using old insurance documentation as the financial costs would have been devastating for their business and threatened its survival.
Insurance documents can be complex, and their retention period varies by policy type. Occurrence-based liability policies must be kept for indefinitely while property policies need to be kept for six years or so after renewal of coverage has ended. Claims-made policies (such as professional liability and directors and officers’ coverage) typically start after claims arise during their policy period but offer an “tail” coverage after its end – these make retention more complex; most businesses agree upon six years after expiry of tail coverage as being an ideal rule of thumb for safe practices.
Establish a formal document retention policy for your business that details how long expired insurance policies should be kept on file, to prevent unintentionally discarding important files and make your files easily accessible for future needs. Furthermore, store these files in an accessible yet safe location, like a locked filing cabinet to avoid damage or loss over time. Invest in professional document management services as they will make retrieving old policies much simpler while also alleviating some manual work on an ongoing basis.
Insurance claims
Insurance claims can be an intricate and time-consuming process, especially for large business policies that span multiple assets and locations with complex documentation. To keep them protected from damage and keep your policies intact for use at any given moment, invest in a climate controlled storage unit, fireproof and waterproof safe or digital system that offers redundant backups to store these documents safely.
At least until your policy has been cancelled or any outstanding claims are settled, it’s a wise idea to retain copies of both its documents as well as any paperwork related to any claims such as repair receipts and hospital bills that pertain to them. Doing this may save a great deal of trouble later when needed as proof that valid coverage exists.
If you need an easy way to organize and protect your insurance documents, consider investing in a binder with plastic inserts. This allows you to label folders easily while also helping prevent fading, mold growth or any other damages to them.
Insurance agents typically require customers to keep copies of their policies for at least 6-7 years after expiry as part of audit requirements. Consult your tax advisor as to the exact length of time your documents should remain stored.
Assuming you aren’t dealing with an accident-related claim, it is advisable to keep all of your car insurance documents until the claim has been resolved – this may take months, so keeping all paperwork will likely benefit both you and your insurer in the long run.
Since most insurers utilize electronic data management systems for client information storage, some still require their customers to keep hard copies of their insurance documents – especially workers’ compensation, personal injury and property policies – for several years after purchasing coverage. Doing this may prove crucial if ever needed as proof.