But the temporary driver’s license expires, at which point you must use your permanent driver’s license. You need to carry it to prove you are legally able to drive. You use a temporary driver’s license while waiting for your permanent driver’s license to come in.

Think of a binder like a temporary driver’s license. What is the difference between a binder and a declaration page (certificate of insurance)?Īn insurance binder is a temporary contract that proves your insurance company will cover you and your property. Again, the earlier in the homebuying process you get a binder, the better. If you wait until last minute to get a binder, your closing date may be delayed. But the earlier you get it started, the faster your agent can work through any problems that may arise. Your insurance company can usually produce a binder quickly, often within 24 hours of notice. As well, this gives your lender and financers enough time to process any paperwork that is necessary to close.

This time allows you and your agent enough time to work out the details of your policy and your binder. This agreement is often signed 45 days before the closing date. We recommend that you discuss getting a binder with your insurance agent soon after you sign the purchase and sales agreement. It is important that you touch base with an insurance agent early in the homebuying process to make sure that you get a binder in time. Your lender or realtor may give you a few leads on insurance, but ultimately it is your choice which insurance company to go with. Your responsibility as the homebuyer is to get an agent and get an insurance binder. Your lender cannot start the loan process without an insurance binder. To make sure you have homeowner’s insurance, your bank, your mortgage firm, or any other agency or firm who deals with the financial end of homebuying, is going to need an insurance binder so that you can get a loan to close.

Why do I need an insurance binder prior to closing on a property?īefore you buy a home, your mortgage lender is going to require that you have homeowner’s insurance. To sum things up: a binder is one-page contract issued by your insurance company that guarantees that you’ll be insured at the time of close.

Information about the insurance company.

There are a few important details outlined in an insurance binder, including: They call it a binder because the contract “binds” an insurance policy that does not yet exist. Not at all.Īn insurance binder is usually just a one-page document. You may be curious: Does an insurance binder look like one of those three-ring binders you used in school? The answer is, no. This contract is a guarantee by the insurance company that they will insure your home at the time of close. Put simply, a binder is a temporary contract issued by an insurance company.

Issue insurance binder to broker