An insurance binder is a one-page legal contract issued by an insurance agent or company that confirms the issuer's commitment to provide insurance to the named insured. It serves as temporary proof of insurance -- or binding coverage -- until the full insurance policy is officially issued.
Video of the Day
Binders can be written for any type of insurance, including property, life and health. Regardless of the coverage type, all insurance binders should clearly specify the names of the insured and insurer, the scope and amount of insurance (i.e., what's covered and for how much), and the time frame of the coverage commitment. Insurance binders are often issued for an initial 30-day period to provide enough time for the formal policy to be completed and made available to the policyholder.