A binder is a preliminary or temporary agreement that provides coverage until a policy can be written or delivered.

When a person is purchasing a new home the lawyer will require that a binder be provided by the insurance agent or broker. This binder needs to show the named insured as how title will be registered, the location of the property that is insured and any mortgage information. The mortgage information must be accurately stated as to name and address. The policy document replaces the binder.

When a new automobile policy is set up there is a temporary liability card (pink card) prepared. This card is for 30 days and is called a "binder". It is the responsibility of the agent or broker to be sure that the client has up-to-date information. If there is a delay in the preparation of the policy documents then a new binder needs to be issued. It is the responsibility of the client to inform the agent or broker of any address change.

Check the dates of your current binder to be sure that you are always carrying proof of insurance for your vehicle. You can be subject to a fine or even have your vehicle impounded if you can not produce this proof when asked by civil authority.

Turners Tips wants you to have control of your insurance. Talk to your agent or broker if you have any questions or doubts about your insurance.