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Does a car insurance binder cover the car immediately upon purchase?
An insurance binder is a temporary car insurance contract that provides proof of coverage until you receive a permanent policy.Skip to article
Written by:
Prachi Singh
Contributing Writer
Prachi is an insurance writer with a master’s degree in business administration. Through her writing, she hopes to help readers make smart and informed decisions about their finances. She loves to travel and write poetry.
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.
The general definition of an insurance binder is a temporary insurance contract that provides proof of coverage until you receive a permanent car insurance policy. However, the definition and point of actual coverage are different for every state and also different for each policy.
Typically an insurance binder is immediate insurance coverage that can be in oral or written form. The binder’s purpose is to provide temporary insurance coverage for a specified time until a formal policy is accepted or denied.
Most policy language sets policies effective the next day at 12:01 AM, so some agents do not have the authority to issue an effective binder immediately. An agent issues a binder to the customer, so your boyfriend should contact his agent to determine why they state he is not covered and when the binder would have been in effect for coverage if it was not at the time of the accident.
If he needs more information on understanding auto insurance binders, he can contact your state’s Department of Insurance for consumer help.
— Michelle Megna contributed to this story.
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Laura Longero
Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.
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John McCormick
Editorial Director
John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.
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Leslie Kasperowicz
Managing Editor
Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.
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Nupur Gambhir
Managing Editor
Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.
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Prachi is an insurance writer with a master’s degree in business administration. Through her writing, she hopes to help readers make smart and informed decisions about their finances. She loves to travel and write poetry.