Lenders require you to provide proof of home insurance before closing on your home. If your insurer can’t issue you a policy before you close, you’ll need a homeowners insurance binder, which is a document that serves as temporary proof of coverage. Here’s what you need to know about insurance binders and how to get one.

Table of contents

  • What is an insurance binder?
  • What information does a home insurance binder include?
  • How to get an insurance binder
  • Insurance binder FAQs

What is an insurance binder?

An insurance binder is a temporary document you can show a lender to prove you have insurance while waiting for your insurer to issue you a formal policy. It includes details about your policy, such as what it covers, your policy limits, and the binder’s expiration date.[1] Your home insurance company may issue you an insurance binder if it can’t provide you with a policy immediately.

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When do you need an insurance binder?

You only need an insurance binder if your insurer can’t immediately provide you with a policy. Some scenarios where you may need an insurance binder to provide proof of coverage include:

  • Closing on a mortgage

  • Switching home insurance companies

  • Buying a second home[2]

Learn More: Guide to Secondary Home Insurance Coverage

Learn More: Guide to Secondary Home Insurance Coverage

What information does a home insurance binder include?

A home insurance binder generally includes the following:

  • Deductible amounts: It will list your deductible — what you pay out of pocket before your home insurance coverage kicks in.

  • Coverage amounts: Binders also document the amounts for coverages, like liability and dwelling insurance.

  • Perils covered: Binders outline which perils — events that can damage your home, such as wildfires, earthquakes, and floods — your policy covers and doesn’t cover.[1]

  • Insurance company information: Home insurance binders usually list your insurance company’s name and contact information.

  • Conditions: A binder may also list state-specific conditions that outline how the laws in your state influence when and how an insurer can cancel your policy.

Read More: How Much Homeowners Insurance Do You Need?

Read More: How Much Homeowners Insurance Do You Need?

What’s not included in a home insurance binder?

Insurance binders typically don’t include coverage limits. If yours doesn’t, ask your agent for the information.

How to get an insurance binder

To get an insurance binder, just request one from your insurer. It will typically mail you a physical copy of the binder. If you need to show proof of home insurance immediately, ask for a digital copy.[3]

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Insurance binder FAQs

It can be tricky to know if you need an insurance binder and how it works. We’ve answered some commonly asked questions about insurance binders below.

  • Do all insurance companies provide insurance binders?

    No, not all insurance companies provide insurance binders, though most do.[3]

  • Does an insurance binder expire?

    Yes. You can only use an insurance binder as proof of insurance for a certain period of time. They’re typically only valid for 30 to 90 days. You’ll need to prove you have coverage with a certificate of insurance once the binder expires.[3]

  • Can your home insurance company cancel a binder?

    Yes, your home insurance company may cancel a binder if it determines that it can’t issue you a policy. An insurer may have to send you a written notice of cancellation before it cancels your binder, depending on your state’s laws.[4]

  • Is an insurance binder the same as a certificate of insurance?

    No, an insurance binder is different from a certificate of insurance. While an insurance binder provides temporary proof of insurance, a certificate provides proof of insurance for as long as your policy is active.[3]

  • What’s the difference between a home insurance binder and a declaration page?

    A home insurance binder provides temporary proof to a lender that you have home insurance coverage. By comparison, a declaration page is the first page of your policy — it summarizes your coverages. Once your insurer issues your policy, it eliminates the need for a home insurance binder.[5]

Sources

  1. International Risk Management Institute. "binder." Accessed April 18, 2023
  2. Massachusetts Division of Insurance. "A Massachusetts Guide to Understanding the Insurance Policy Covering Your Home." Accessed April 18, 2023
  3. Progressive. "Insurance Binders Explained." Accessed April 18, 2023
  4. Agent Resource Site. "Insurance Binder Dorm Sample Certificate." Accessed April 18, 2023
  5. Allstate. "What is a homeowners insurance declarations page?." Accessed April 18, 2023