Binder
A binder is a temporary insurance contract that provides evidence of coverage before the policy is issued. Check the accepted terms, effective period, and authority for the particular risk. A request to bind is not the same as confirmation that coverage is in effect.
Why binders exist
Policy issuance lags behind the moment coverage starts. Real estate closings, loan funding, and contract start dates cannot wait for the carrier's back office, so the binder bridges the gap. The ACORD 75 is the standard insurance binder form, and lenders and closing attorneys often ask for it by name.
A binder shows the essentials: named insured, carrier, coverage, limits, effective date, and any loss payee or mortgagee. It stands in for the policy until the dec page and forms arrive.
What the agency should check
A binder has an effective period and may end when the policy is issued or on its stated expiration date. Duration and extension rules depend on the binder, line, and applicable law. Track the issuance and expiration dates so an outstanding policy is followed up before the temporary arrangement ends.
The person arranging the binder must act within the authority granted for that risk. Keep the accepted terms, effective date and time, and evidence of the authorized bind together. A request for coverage and an authorized bind are different steps.
A follow-up worth assigning
A lender receives a binder for a closing, but the policy has not arrived. Create an issuance follow-up with the binder expiration date and a named owner. Resolve the outstanding document before assuming the temporary evidence will continue to satisfy the lender.
Common questions
Is a binder the same as a certificate of insurance?
No. A binder is a temporary insurance contract. A certificate summarizes insurance information; issuing one does not itself add or change coverage. Check the policy and any applicable endorsements for the rights of the parties.
How long does a binder last?
Check the binder's stated terms and applicable requirements. It may end when the policy is issued or at a specified expiration. Do not assume a standard number of days or an automatic extension.
Sources
Part of the Relay insurance operations glossary. Updated 2026-09-07. See how we source content.
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