Policy Structure & ProvisionsQuestion 509 of 531
A binder in property and casualty insurance is:
a.Temporary evidence of coverage until the policy issues
b.A permanent replacement for the written policy form
c.A list of the exclusions that apply to the policy
d.A document that cancels the insured's coverage early
Explanation
A binder is a temporary agreement, oral or written, that provides immediate evidence of insurance coverage until the insurer issues the formal policy or declines the risk. It contains the essential terms so the insured is protected in the interim. A binder is not permanent; it is superseded once the actual policy is delivered or the coverage is formally declined.
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Related questions on this topic
- The part of an insurance policy that identifies the insured, the property or risk, the policy period, and the coverage limits is the:
- Subrogation is best defined as the insurer's right to:
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