insurance binder acord for personal auto policy

It is recommended that individual binders be issued for each company affording coverage. A broker may only exercise the authority extended by the company. Generally, a broker cannot bind insurance. Most agency agreements contain stated 'time frames' within which the company must be notified of any risk bound. If the authority is not in writing, the agent should obtain written authority. Underwriting instructions (per company manual, agency agreement,Ĭorrespondence and/or company underwriter). Do not use vague or all-encompassing terms which may imply coverages not intended, such as 'All Risk.' If possible, use the same language and terminology that will appear on the policy.Īn agent may only issue binders which comply with the company's The language in the binder must be precise. The maximum and/or minimum term of a binder may be governed by state statute and/or company underwriting instructions.Īt the end of the binder's specified term, all coverage expires unless a new binder has been issued or the expired binder has been replaced with a policy. Preparation must be complete and accurate.Īll binders must conform to the state insurance code for the state in which the subject of insurance is located. It is imperative that only authorized people prepare them. The improper use of binders has become a major cause of producer's Errors and Omissions claims. For Commercial Lines, the layout format within the General Liability Section of the ACORD 75 is customized to the ISO Policy Simplification program.īefore issuing any binder, the following important considerations should be reviewed and considered carefully:Ī Binder (Cover Note) is a temporary insurance contract which provides coverage and must be underwritten as an insurance policy.

The ACORD Insurance Binder addresses both Personal Lines and Commercial Lines risks, although most ACORD Personal Lines applications contain a 'built-in' binder. The descriptions explain the information needed to properly issue a binder. This guide provides basic instructions to complete the ACORD Binder forms.

Insurance binder acord for personal auto policy