Is it safe to throw away old insurance policies?*
Once you receive a new insurance policy, there is often no practical reason to keep the old one. Note the following important exceptions and how to prepare for them:
- If a claim is pending, keep the insurance policy and claim with your Active files until resolved. Afterwards, keep the expired policy and related documents in a Tax folder, to be kept for ten years (see General questions for an explanation of how to file other documents related to a claim).
- If you anticipate a possible claim based on an event that occurred during the period of an old policy, file the agreement into a Monthly folder to keep for two additional years, or into a Tax folder to keep for ten years. Such claims generally do not apply to policies for health, disability, life, rentals, or automobiles having no unresolved accidents. For homeowner's policies, consider damage that may go undiscovered for some time such as rain-water leaks, or lawsuits that may be brought against you for damages occurring in the past. (The time limit for lawsuits or claims is typically 2-3 years for most states but may be extended indefinitely to allow reasonable time for discovering unnoticed damage.)
- For business liability or malpractice insurance, consider keeping past policies indefinitely to cover occurrences throughout the life-span of your business. Use labels provided with the FreedomFiler Business Kit.
Keep in mind that your insurance provider typically keeps records of old policies for at least five years by state regulation, and is obligated to provide a summary of your coverage history should you ever apply for a discount on a new policy.
*NOTE: While FreedomFiler® provides a method of automatic purging which eliminates the need
to review files, you must ultimately decide which documents are kept two years, ten years, or indefinitely.
FreedomFiler® is not liable under any circumstances for claims of loss or damage arising from suggested
document retention guidelines. Consult a professional advisor to determine your specific document
retention needs and adapt your system accordingly.