If you have an online account for your auto insurance, most of the information will be kept for your online. However, it is always a good idea to retain a copy of the policy agreement and declarations page for any current auto insurance policy.
Because the IRS can audit taxpayers for returns regarding the past seven years, you may want to keep some form of documentation about your payments for insurance policies until then.
Paying Your Premium
For most auto insurance companies, you will have the option to pay your auto insurance premium in one lump sum every six months or in monthly installment payments.
You will get an invoice for the payment of the premium. The most important reason that you would want to save information about the payment of your premium is for tax purposes.
In the unlikely event that you are audited by the IRS, you may want to have copies of all of your bills for the past seven years, which would include statements regarding the payment of your auto insurance policy. However, this is very unlikely to affect your tax payments.
One of the reasons it could be a good idea to hang onto information about your past payments and premiums is that you will have a clearer idea of whether your premium has increased and by how much.
There are many factors that increase the price of your premium, and you may want to discuss with your insurance agent why it went up in the event of an increase.
In the event that your premium increases, it may be a good opportunity for you to consider shopping around for other auto insurance options. When asking for auto insurance quotes from other companies, make sure that you still retain current coverage by paying your premium on time.
It is required by almost every state, and if you do not have current coverage for failure to pay your insurance premiums, this could mean that your insurance company can cancel your policy. This will reflect on your record and may mean that you pay higher rates from other auto insurance companies.
Important Auto Insurance Documents
One of the most important documents for your auto insurance coverage is your insurance card or physical proof of insurance.
In some states, in addition to having to maintain at least the required amount of auto insurance coverage, you must also carry physical proof of insurance (your insurance card) when driving. If you are pulled over by a police officer or involved in an accident without having proof of insurance, you could face stiff penalties.
If you lose your insurance card, you can contact your insurance company to have a copy sent to you as soon as possible. It is never a good idea to get caught driving without car insurance and is not worth the hassle.
There should be no charge for your insurance company sending you a duplicate insurance card.
If you cannot remember your auto insurance company, you can contact the department of motor vehicles for your state because there will likely be a record kept on file from your auto insurance company pertaining to your current coverage.
You will still need to contact your own auto insurance company to have an additional card sent to you.
The other important document from your auto insurance policy to retain is your declarations page. This is where all of the important information regarding your auto insurance policy can be found.
In the event that you have to file a claim from an accident under your auto insurance policy, you may need to consult the declarations page for information about coverage under your current auto insurance policy. You can also find information about your deductible from the declarations page of your policy.
Recap on Retaining Documents Regarding Your Auto Insurance Policy
The two most important documents to always have on hand regarding your auto insurance policy are your current insurance card (physical proof of auto insurance coverage) and your actual auto insurance policy.
From your actual policy, the declarations page is the most important to be able to find. Statements regarding your payment of insurance are likely only relevant for tax purpose. To be safe, you might want to hold onto them for seven years in the event of a tax audit from the IRS.