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What is a Car Insurance Binder?

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By Erin Thompson on May 14, 2021 in Insurance Basics

Contrary to a very literal initial interpretation of this concept, a car insurance binder is not a 3-ring binder full of all your insurance documents like ID cards, payment receipts, and more. It’s actually very different from that, so let’s break it down.

What is a Car Insurance Binder?

A car insurance binder is temporary proof of insurance that allows you to provide the evidence of coverage required by law that may allow you to legally drive your car when your policy is still being processed. So, if you want to go back to thinking about it from a literal standpoint – it’s here for you when you’re in a bind. Get it? Cool.

With companies like Say and our instant digital ID cards and policies, this likely doesn't come into play. However, if you have to set up a meeting with an insurance agent and file paperwork, there might be a little bit of a delay. The main reason you’d need a car insurance binder is to prove that you’re approved for the coverage limits and are in the process of being covered.

What is an Insurance Binder for a Car?

Car insurance binders aren’t just for car insurance. Value Penguin says, “People often need home and car insurance binders to provide proof of insurance coverage when purchasing a house with a mortgage or a new car with an auto loan.” So, it’s not just for that moment of panic if you get pulled over and don’t have an official ID card yet – it’s also to prove you are covered for purchasing in the interim of getting a new policy.

An important aspect of car insurance binders for cars (and homes) is that the insurance company granted you an insurance binder for a set period of time.. However, at the end of the period of time and evaluation by the insurance company – you could either be approved and issued coverage or rejected.

The specifics of each car insurance binder vary on policy and company, so be sure to communicate clearly about the details of your binder.

How Do I Know If I Need A Car Insurance Binder?

Back in the olden days (okay, just a handful of years ago), car insurance policies took a long time to process. You’d need a car insurance binder if there was a delay between when you applied for coverage and when the company would tell you if you’re approved for the specific coverage limits. If paperwork had to be mailed and processed it would cause a lag in this process. Since then, the insurance industry has made strides with digital policies. This makes the whole insurance shindig a lot faster for the insured.

100% digital policies, like Say offers, allow drivers to receive a policy the same day – even within minutes. So, no more worry about if you’re covered while you wait for paperwork to process. Shoot, we prefer no paperwork at all.

Proof of Car Insurance Binder

Paper copies of car insurance binders may consist of several pages of legal paperwork. However, you can usually get digital proof of coverage online, so you don’t have to lug your paper version around.

This same paper vs. digital conversation comes up again when we’re talking about insurance cards. It’s important to know if you have a digital insurance card, like Say offers, you’re able to prove coverage anytime, anywhere. Some drivers are worried about whether or not the digital insurance cards are accepted as proof of insurance, and we’re here to reassure you -- yes, they are in all our Say states.


Despite being a modern 100% online company, we know our readers have questions about big insurance topics and we are here with answers for you at all times. Now you know! A car insurance binder is there for you when you’re in a bind, or just waiting for your policy to be processed.

If you have any questions you want answered, message us on Facebook, Twitter, or Instagram!

Erin Thompson is the Marketing Manager for Say Insurance. She's responsible for guiding the strategic direction of all Say marketing campaigns. Prior to joining Say, Erin worked for a media agency based in Columbia, MO. She spent several years developing successful advertising campaigns for a diverse set of clients across the United States. Erin began her career in television advertising after earning her Master’s from the University of Missouri Journalism School with an emphasis in Strategic Communication. Her love of communication and helping people directed her to the insurance world.