In these cases, an insurance binder would be useful. Similarly, you can get an insurance binder if your lender requires proof of coverage before closing on your new car’s auto loan.Īpplication turnarounds can sometimes stretch out depending on your background and risk profile. After your main policy is finalized, its coverage takes over and the binder expires.
For example, you can get a home insurance binder to meet the insurance requirements for closing on a mortgage loan. Binders are generally used when you finance your car, home or commercial property and you need immediate coverage while your official policy is being finalized.
