If you have piles of old car insurance documents lying around, you might be wondering if you can get rid of them or how to properly dispose of them. While keeping a record of important documents is an excellent habit, certain documents might not be worth hanging onto. To help you determine which car insurance documents to keep and which to discard, keep reading.
Why you need to keep a copy of your current auto insurance policy
Before we discuss which old car insurance documents to keep, let’s dive into the importance of keeping a record of your current auto insurance policy. A car insurance policy is a legally binding contract between you and your insurance company.
The contract details your coverage (including the policy deductible and limit), any exclusions, and the terms and conditions of the policy.
In exchange for the premium you pay, the insurance company provides financial support in the event of a loss, such as a collision. For example, according to the terms of your contract, your insurer may agree to compensate you in the event that you are liable for a car accident under the third party liability coverage portion of your policy.
Your insurer is required to provide this financial report for the entire duration of your policy.
Should you need to file a claim, the insurance company will refer to your policy and its terms and conditions to settle the claim. Knowing your policy details will help you decide what type of claim you file and how much of the damages will be covered.
Given the important information that is included in your auto insurance policy, it’s crucial to retain a copy for your records. This can be a physical copy or a digital copy. No matter what type you retain, make sure it is stored in a safe place, such as in a locked drawer or on a computer, external hard drive, or cloud server.
How long should I keep old auto insurance documents?
Ultimately, how long you want to keep old auto insurance documents is your decision. That said, experts tend to agree that holding onto these old documents is not necessary after the policy has expired.
Once you purchase a new policy, the old one can usually be discarded, unless you filed a claim during the policy term that is still pending.
If you have an ongoing or pending claim on your last insurance policy, it’s a good idea to keep the document until the claim is settled. Once the claim has been resolved, you can technically dispose of the document though you may find it helpful to retain a copy for your records should you need to file a similar claim in the future.
Beyond discarding documents for car insurance policies that are no longer in effect, you also shouldn’t hesitate to dispose of any old insurance policies for vehicles you no longer have.
Car insurance documents you should keep
To determine how long to keep old car insurance documents, you will need to consider the reasons you might need them in the future. Even though you may not be required to hold onto certain documents, doing so could come in handy. Of all the documents you will receive as part of your auto insurance policy, we recommend keeping the following (at least until your policy expires):
Your auto insurance card
An auto insurance card, also known as a pink slip, can easily fit into the glove compartment of your vehicle. Ideally, you should have it on your person or in your vehicle anytime you are behind the wheel. Some Canadian provinces have started offering digital pink slips that you can access on your smartphone, however, a paper copy could still be important if you are pulled over in an area with no cell service.
If you are pulled over by the police or get into an accident, you will need to provide the officer or other driver with your insurance details, all of which can easily be found on your auto insurance card.
The declarations page of your car insurance policy
Anytime you purchase a new auto insurance policy, you will receive a declarations page along with your other policy documents. Beyond your name and home address, the declarations page will include a description of your insured vehicle, your policy number, and a summary of your policy’s coverages and deductibles.
Plus, it should have an explanation of the claims-filing process, which will come in handy if you’ve never filed a car insurance claim before.
Documents relating to an insurance claim
If you recently filed a claim with your insurance provider that has yet to be resolved, keep all documents relating to the claim. This includes any necessary receipts for medical expenses or legal fees, vehicle repair bills, and any other paperwork pertaining to the claim. If the claim is related to an accident, you should also hang onto any evidence gathered, such as videos or photos of the accident and the official police accident report.
These documents should only be disposed of once the claim has been settled.
Your billing statement
You may wish to keep a record of your billing statement(s) for tax purposes, especially if your insurance is related to a business (in the case of a commercial auto insurance policy). If you are audited by the Canada Revenue Agency (CRA), you may be required to show your insurance bills for the last four years.
If you paid for your car insurance in installments, you may need to provide the CRA with a billing statement for every single month in the past four years. Alternatively, if you pay for your policy annually, you will only be required to save four billing statements. Depending on your insurance company, you may be able to access copies of past bills on the company’s website.
If you only have personal auto insurance, not commercial auto insurance, you do not need to keep any old billing statements once the policy has expired. That said, you might find it helpful to keep a record of your billing statements when shopping for a new policy and comparing rates.
Your car insurance premium is not its own document. Rather, it’s a key piece of information usually included in your billing statement(s). We recommend holding onto at least one billing statement per policy so that you are always aware of your rates.
Doing so can give you a clear indication of how your policy rates are changing, which may prompt you to shop around for a better rate when your policy is up for renewal.
Reviewing the average cost you paid a few years ago compared to the present may help you determine if you are paying too much for your policy. Working with a broker is another way to ensure you’re getting the best coverage at the lowest rate. Contact us to learn more about the services we offer Canadian drivers.
Car insurance documents you don’t need to keep
When agonizing over which car insurance documents to keep, remember that there are several that won’t benefit you now or in the future. A list of documents that you do not need to keep include:
Your main policy document
Your main policy document is a lengthy document that outlines all the details about your policy limits, discounts, coverage, endorsements, and more. Many people choose to keep this document until they purchase a new policy or renew their existing one, however, it’s not necessary to do so.
Nowadays, most insurance companies provide digital versions of or access to these documents, so long as you create an account on the insurance company’s website. If your insurer does not offer digital policy documents, hold on to them until your policy expires. But the moment your policy expires and you no longer are paying for it, you shouldn’t hesitate to dispose of your main policy document.
Cancelled cheques from paid premiums
If you made insurance payments by cheque, it must be noted that many banks no longer return cancelled checks. However, if yours does, you do not need to keep a record of these.
What happens to your old auto insurance policy when you switch to a new insurance provider?
There are many reasons that Canadian drivers choose to switch insurance providers. From better customer service to a lower cost or superior coverage options, you may decide that renewing your current policy is not in your best interests (in which case an experienced broker from BrokerLink can help you find a new policy).
Regardless of your reasons, when you switch insurance providers, you might be tempted to dispose of all car insurance documents from your past provider - but this could be a mistake.
Though it’s usually fine to discard car insurance documents relating to an expired policy, there are a few instances in which holding onto them may be wise. Namely, if your car insurance policy is cancelled before the expiry date (and you are eligible for a refund), if you have a claim pending with your old provider, and if another driver has a potential claim against you.
How to properly dispose of old car insurance policies
Car insurance documents typically feature sensitive information about your identity. This may include your name, home address, policy numbers, and other personal information. If you are concerned about privacy or identity theft, it is strongly recommended that you shred any paper documents as opposed to tossing them in the trash as is.
If your documents are stored digitally, consider encrypting them so they cannot be easily accessed in the event of a hack.
How should I store important car insurance documents?
All important documents, from your car insurance policy to your passport, should be stored safely. For paper documents, consider storing them in a portable, fire-resistant lockbox. Ideally, you should avoid storing this box in the basement or on the floor in case your home is ever flooded.
For digital documents, it might be wise to store them in the cloud or on a flash drive or other portable storage device. Services like Dropbox and iCloud will store your electronic documents safely and the advantage of digital storage is that you can access your files wherever you are so long as you have a reliable internet connection.
Get in touch with BrokerLink for more information on important auto insurance documents
When you purchase an auto insurance policy, odds are you will receive a slew of paperwork, whether physical or digital. Since policies typically last one year, this could add up to a significant amount of paperwork after a few years. Knowing which documents are worth keeping and why, as well as which can be disposed of and how to dispose of them, is critical.
If you have questions about important auto insurance documents, contact BrokerLink today. Our insurance advisors are knowledgeable, friendly, and always willing to share their expertise.
Plus, we make shopping for car insurance easy so if your current policy is about to expire, we can help you find a policy with great coverage at a low cost. Get started today by taking advantage of BrokerLink’s free quotes. We offer free car insurance quotes to all drivers in Canada, whether you drive a Ford or a vintage vehicle.
Give us a call, send us an email, or visit us in person at one of our many locations throughout the country. You can also use our online quote tool to request your complimentary quote right now. All quotes are accurate, competitive, and obligation-free. What do you have to lose?