Identity Protection Tips for the New Year: Get Rid of Old Insurance Records

At the end of the year, it is time to reflect on the financial missteps of the past and to attempt to find a way to avoid these pitfalls in the future. One thing everyone can do is to spend some time discarding old, outdated financial records. This annual disposal not only keeps records neat, tidy, and organized, but it also protects people from the threat of identity theft.

According to The Connecticut Society of Certified Public Accountants, there are several common documents which contain private information that should be disposed of regularly. Among these items are:

• Credit card bills with a statement date greater than one year earlier
• Pay stubs which have already been verified against a W-2
• Any documentation or other paperwork for automobiles, major appliances, and other vehicles which have been sold or otherwise discarded.
• Cancelled checks dated greater than one year earlier
• Paperwork for insurance policies which are no longer in force

Most people do not make a regular practice of discarding such items, so going through the accumulated records of several years may take quite a bit of time. However, the recordkeeping process is so streamlined after the initial purge that it motivates most people to stick with it on a regular basis.

Although there are many records which can be discarded after about a year, others should be retained for a longer time period. Some of these are kept for the sake of the filing of the annual federal tax return. At the IRS.gov website, the agency advises taxpayers on what paperwork should be retained, and for how long. They suggest that any documentation which supports the information found on the federal tax return should be kept for no less than three years. The same can be said for the copies of tax returns which the individual should file away each year. In an abundance of caution, the Federal Citizen Information Center recommends website that copies of tax returns should be kept for six years since that is how long the IRS maintains their records.

Insurance Paperwork: What to Save and What to Shred

Insurance paperwork is another matter entirely. Proof of insurance, insurance premium bills, and other mailings from the issuing company do not need to be kept once the policy has expired or the insured property has been sold or disposed of in some other manner. What people must keep accessible are any proof of insurance cards or insurance premium bills for policies that are still active. Not only do these items contain sensitive personal information which should never reach the hands of others, but also these documents contain information that is invaluable to the policyholder in case of an emergency. Knowing exactly where this information is kept is vital to anyone’s peace of mind. Copies of the insurance policies themselves should also be kept in a safe location where they can be easily retrieved and reviewed in case the insured needs to file a claim.

Now that the cupboards, closets, and drawers have been cleaned out and a pile of documents which need to be discarded has been created, it is time to properly dispose of the paperwork. Tempting though it may be to sweep it all into the nearest trash bin and be done with it, this is not the recommended method for disposal. Most, and probably all, of these papers contain information that should not be accessible to anyone else. Anything that contains an account number, a social security number, and even merely a name and address should be shredded to prevent the information from being made available to the wrong person. When in doubt about whether something is safe to throw away, simply shred it – better to be safe than sorry.

Many people now have a shredder in their home for taking care of just this purpose. In order to prevent identity theft, most mail and other personal documents should be shredded rather than simply being put intact into the trash or recycling bin. Those who do not yet have a shredder should consider purchasing one. These inexpensive items can be found at most office supply stores for around $20. For larger jobs, or for those who envision only infrequent use of a shredder in their home, several companies offer shredding services to the public. These are generally available for a fee, however, some communities and organizations will occasionally sponsor a shredding event where individuals can bring a box or bag of documents to be shredded for free.

Professional shredding services are a great way to get caught up on this necessary task, but considering how vital protecting personal information is, most people should acquire their own shredder. Keeping up with shredding of personal documents weakens the threat of identity theft and keeps clutter in the home to a minimum.