What is an oral or written statement that provides temporary insurance coverage until a policy can be issued?

A binder is a temporary insurance agreement that provides coverage until a formal policy is issued. It serves as an immediate assurance of protection for the insured in circumstances where waiting for the final policy might leave them exposed. Binders can be oral or written and are essential in situations where quick coverage is necessary, such as when a person purchases a new home or vehicle.

The significance of a binder lies in its ability to establish coverage without the need for a finalized policy, which may take time to prepare. It is crucial for ensuring that the insured has protection from the moment they need it, even if the official policy hasn't yet been formally issued. This mechanism helps to bridge the gap between the initiation of coverage and the delivery of the formal insurance contract.

In contrast, terms like contract, agreement, and consideration describe different aspects of the insurance process, but they do not specifically refer to the temporary coverage that a binder represents.