What is a Binder?
A binder is a legal agreement issued by either an agent or an insurer to provide temporary evidence of insurance until a policy can be issued. Binders should contain definite time limits and should be in writing. And binders should clearly designate the insurer with which the risk is bound.
Binders are helpful because they allow you to have proof of coverage during certain periods. For example, having proof of coverage while waiting for your new insurance policy to arrive in the mail. Binders allow you to show proof of coverage to a lender while waiting for a new policy to start.
A binder is similar to a declarations page ( sometimes referred to as a “dec page”); however, it is not the same. A binder is a brief legal agreement to provide temporary evidence of insurance until a policy can be issued. Binders typically last 30-90 days. A declarations page usually lasts the entire term of a policy.
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Welcome to Surplus Lines insurance 101: an overview of the players in the surplus lines insurance industry and their roles and responsibilities. Continue Reading
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