What is the purpose of an insurance binder in Ohio?

The purpose of an insurance binder in Ohio is to provide temporary coverage until a formal policy is issued. An insurance binder is a legal document that serves as a temporary agreement between the insurer and the insured. It offers immediate coverage while the insurance company processes the application and finalizes the policy details. This ensures that the insured has protection from the moment they apply for coverage, rather than having to wait for the formal policy to be issued, which can take time.

This temporary coverage allows individuals and businesses to begin their insurance protection right away, which can be crucial in situations where immediate coverage is essential, such as in the case of new property purchases or other time-sensitive insurances. Once the formal policy is complete and issued, the binder is typically replaced by the full policy document.