An insurance binding letter is a one-page legal contract issued by an agent or insurance company that confirms the issuer’s commitment to providing coverage to a named insured. It serves as temporary proof of coverage — or binding coverage — until a full insurance policy is officially issued.
Basic knowledge of adhesives
Constraints can be written for any type of insurance, including property, life, and health. Regardless of the type of coverage, all insurance binding papers must clearly state the name of the insured and the insured, the scope and amount of coverage (i.e., what is covered and for how much), and the timeframe of the insurance commitment. Insurance binding paper is usually issued within the first 30-day period to provide sufficient time for the official policy to be completed and provided to the policyholder.