Insurance Records

It may seem remarkable but, in Oregon, insurance companies don't have to keep records. And, often, they don't. Many companies throw out polices once they turn seven years old. Other companies have been purchased so many times that the records are simply lost in the transfer of assets. Even electronic records have been lost to old technologies no one can access anymore.

This can be a big problem for the person, or business, that finds itself defending a lawsuit stemming from events that took place in the distant past. And it happens more often than you might suppose. Recently, we have seen several lawsuits arising out of acts more than ten years old.

When this happens, the insured has to cobble together a policy from the documents that still exist, and the memories of the agent and the people who bought the coverage. We have created insurance coverage out of cancelled premium checks, pieces of the policy the mouse missed, and miscellaneous documents retained by the insurance agent.

In these situations, the insured must not only prove what is covered — is it automobile coverage, homeowner's insurance or what? — but:

• The risks insured against
• The policy limits and deductible
• How long the policy was in effect
• What premiums were paid

This can be nearly impossible without at least some documentation.

Where the policy limits are large, some records can be reconstructed with documents from the reinsurer (the company that insures the insurance company). Reinsurance agreements will often reference the original policy. If you are lucky, the reinsurance documents may even contain the original policy. Reinsurers rarely keep records of underlying policies unless the policies exceed $1 million, however.

The safest — and cheapest — strategy, of course, is to hang onto the policies.

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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