Homeowner Insurance Binder

A homeowner insurance binder is an agreement between you and your insurance company that provides temporary proof of your homeowners insurance, until you receive your actual policy.

What is an insurance binder?

An insurance binder is a temporary document issued by an authorized insurance representative that can serve as proof of insurance for your home, car, or property.

Who needs a homeowners insurance binder?

Anyone who gets homeowners insurance should ask for a binder. That way, you’ll have proof of your homeowners policy in case your mortgage lender, or other parties, need to make sure you’re properly insured when buying a home. Your insurance binder will also detail what exactly has been insured on your policy, in case you’d like to double check and make sure you’re properly covered.

When would you use an insurance binder?

You’d use an insurance binder anytime you’re asked to present your insurance, before your policy has been officially issued. Traditionally your policy won’t be issued until it’s been approved by underwriting.

What’s inside an insurance binder?

Here’s a breakdown of what you’d typically find in an insurance binder.

  • Time limits (ie. how long the policy is for)
  • Details about your insurance company  
  • Your insurance coverage amounts
  • Type of policy
  • The perils your policy insures against.

Insurance binder v’s declarations page

A declaration page is a summary of your insurance policy – it includes important stuff like coverage amounts, deductible, who’s covered, and more. Sounds pretty similar to an insurance binder right?

Well yes, except a declaration page is just a summary of your policy and it will generally be issued by your insurance company after the underwriting process is complete.

Think of your insurance binder like a temporary driving license so you can get out on the road and start driving, while the declarations page is similar to your permanent driving license.



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