8/11/2023 0 Comments Acord insurance binder formOnce a policy number has been issued by the company, the company has issued coverage and therefore the client has coverage. Why a company cannot get the paper policy printed and mailed within a couple days is baffling but beside the point. It means a policy number has been issued by the company. A policy issued does not mean the policy papers have arrived. Part of the problem lies in agencies not understanding what it means that a policy has been issued. Remember, a binder is written in advance of the issuance of an insurance policy, not after the issuance of an insurance policy. However, if a policy – which is a contract of insurance – has already been issued, why issue another contract (a binder) just to prove insurance exists? In other words, why would anyone in their right mind write two contracts of insurance on the same risk? Yet this is what happens when one issues a binder on top of an existing policy. It is often used as an evidence of insurance. The Acord 75 field Description states, “A Binder is a temporary insurance contract which provides coverage in advance of the issuance of an insurance policy.” The Acord Insurance Binder form states, “This binder is a temporary insurance contract, subject to the conditions shown on the reverse side of this form.” A binder is a temporary insurance contract.
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