Your potential insurance company will look at your: In some cases, this can take a few days or even weeks to do. Remember that when an insurance company conducts underwriting, they look into the history of an applicant and use it to determine their risk profile and the rates they’ll need to pay for coverage. These policies are usually issued during the underwriting process and have lower coverage limits than actual insurance policies. Read our guide to find out about auto insurance binders and find out whether they’re right for you.Īn insurance binder is a temporary insurance policy that is issued by your insurance company before your actual insurance policy comes into effect.
These are temporary coverage plans that auto insurance companies offer to potential customers. This is where insurance binders come into play. After all, it can take insurance companies some time to approve applications and check your driving history. However, a common question that people have is how to get coverage for their new vehicle when they buy it. If you're thinking about buying a new car or trading in your old vehicle, then insurance is a necessity in the U.S.
