That way, the insurance carrier knows who’s representing the policyholders and who submitted the initial application. Because they can do this, agents are usually listed on the binder. Agent nameĪgents have the authority to bind coverage, which means they can confirm coverage is in place. Because binders are temporary, some also include their own expiration dates. Policy termīinders often include the policy’s effective date and its expiration date. Along with the insurance company name, the binder lists the type of coverage purchased. This may seem obvious, but a binder must name the insurance company offering coverage. Homeowners often add their mortgage company to their coverage as an additional insured. But policies can also have additional insureds, or people who are added to your coverage. The most obvious example is the named insured, which simply means a person explicitly mentioned in the policy. Name of the insuredsĪs an enforceable contract, the binder must state who gets the benefits of the policy. On a home insurance binder you should see limits listed for your dwelling coverage, personal property coverage, and any medical payments or loss of use limits purchased. Limits and deductiblesĬoverage limits are often listed in the binder along, as are deductibles.

Liability insurance covers your legal costs if a third party claims you’re responsible for their property damage or injuries. This often starts at $100,000 but can go as high as $1 million or more on some policies. The binder should list the amount of liability coverage the policy has. For a risk such as a car, the year, make, and model would be listed. This is often identified by the address of the home. In the case of homeowners insurance, the risk is the home that is being insured. The risk is the insured asset, or basically whatever is at risk of being lost. Most binders include the following seven key elements. Usually, they list only the most pertinent details about the coverage.

What is included in an insurance binder?įor an insurance binder to be valid, it must contain certain information. However, insurance binders are enforceable contracts. Much of the policy terms and conditions are presumed. In fact, not all details about the policy are provided in a binder. That way, you can show that you paid for a policy and an insurance company has agreed to cover your risk.īinders are not fully written insurance contracts. Unfortunately, you sometimes need evidence that you’ve purchased a policy, so your insurance company sends you an insurance binder. This often happens because the insurer’s underwriting department still has to review your application. When you purchase insurance, you often need to wait for the insurance company to issue a policy that outlines the details of the contract, such as what’s covered, what’s excluded, how long the coverage lasts.

Issue insurance binder to broker