More importantly though, it's called a binder because it's legally binding. The same terms that are specified in your policy are also legally enforceable as part of an insurance binder.īut why is it called a binder? Isn't it more like a safety net? A bridge? A connection? Well. It's a temporary legal placeholder until your official insurance policy is issued. We’ll break it down.Īn insurance binder basically proves that there’s a formal agreement in place between you and the insurance company.
You can drive it, but you need a car insurance binder.
Does that mean you can't drive your dream car for a whole week because you don't have any insurance? Not necessarily.
You've already called your insurance agent with the car's details and the type of coverage you want, but it's going to take a week for the underwriter to complete the formal contract. After saving for years and browsing for months, you finally found The One-it’s even the right color!
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