Request and Auto Insurance Quote

Is it Safe to Close a Loan on an Insurance Binder?

Yes, it is safe. A licensed agent with authority granted to him or her by an authorized property insurance company in Oregon has the power to issue a piece of paper called a binder, thereby obligating the insurance company to cover the property for at least 30 days. The agent then submits an application to the company with the details of the binder. The insurance company then has 30 days to decide whether to insure you and your property or not. It is a legally binding contract. Hence the name binder. Obviously, if the agent messes up too many times and 'binds' property the insurance company doesn't want the agent's contract will eventually be terminated. The agent better know what the company is willing to insure. So, a binder can be relied upon to provide proof to a lender at closing that the property will be covered. 30 days is usually enough time to fix a problem if there is a defect in the binder, the agency agreement or insurer's ability to pay.