What Is a Home Insurance Binder, and How Do You Get One?

Mortgage lenders require borrowers to buy home insurance as a condition of issuing the mortgage. Before your insurance company issues your formal policy, it’ll often provide a home insurance binder. A binder is a temporary contract that serves as a placeholder until a formal homeowners insurance policy is in effect.^[1] This binder proves that you’ve purchased adequate coverage to protect your home and your lender’s collateral.

You may receive a homeowners insurance binder from your insurer when buying a first or second home. Here’s what you should know about home insurance binders, including what information they include and more.

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Information your home insurance binder includes

Your home insurance binder will include personal information and details about coverage, deductibles, and more. Learn more about what information binders commonly include below:

Named insured: A binder will include your name and your co-borrower’s name, if you’re purchasing a home with someone else.
Insurance company details: Your insurance company’s name, mailing address, and insurance agent’s contact information will also be included.
Policy term: Homeowners policies typically have one-year terms, with the opportunity for annual renewals.
Type of policy: This details the type of coverage you have on your home. For instance, standard home insurance policies commonly include dwelling coverage, personal property coverage, and liability insurance.
Covered perils: Your binder will also include perils covered by your homeowners insurance, such as fire, wind, ice, or hail damage.
Coverage amounts: Your coverage amounts detail the amount of each type of coverage you’ve purchased.
Deductible amount: If you file a claim with your home insurance company, you’ll generally need to pay a certain amount out of pocket before your insurance will pay out. The amount you pay out of pocket is your deductible, which your insurance binder will likely include.
Effective date: Your binder will include your policy start and expiration dates.

Learn More: Homeowners Insurance Guide for First-Time Homebuyers

When do you need a home insurance binder?

You may need a home insurance binder in a few instances, including if you buy a new home, refinance your home, switch your home insurance, or buy a second home.

Closing on or refinancing a mortgage

You’ll need proof of homeowners insurance when securing a new mortgage, whether it’s your first mortgage or you need to refinance. Your lender will likely request a home insurance binder before issuing your mortgage. But your lender may also accept a declaration page if you have a formal policy in place, such as in the case of refinancing your home.

Switching home insurance companies

Likewise, if you switch home insurance companies, you’ll need proof of insurance coverage for your lender. Remember that your home secures your mortgage, and your lender will want to see your home insurance binder as proof of protection for its collateral.

Buying a second home

You’ll also need to share proof of home insurance with your mortgage lender if you decide to buy a second home. Your lender will want to ensure that you have protection in place for the home associated with the mortgage loan.

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How to get a home insurance binder

Many insurers issue home insurance binders, though some don’t. It’s also possible that certain insurance companies will issue you a formal policy you can share with your lender. Keep this in mind as you’re comparing homeowners insurance coverage.

Follow the steps below to get a home insurance binder for a new policy:

1. Shop around for coverage
Work with an insurance broker or use an insurance-comparison tool to compare quotes from multiple insurance companies. Insurance rates vary by company, so it’s important to have a good idea of your options.
2. Decide on an insurance company
When determining the right company for you, it’s important to consider your budget and home insurance needs. Research customer reviews, coverage options, and claims handling for each company you’re seriously considering.
3. Purchase a policy from your chosen company
In most cases, you’ll need to contact an agent to buy a home insurance policy, though some insurers may allow you to start the process online.
4. Request a copy of your binder
After making your initial payment, you can request a digital or hard copy of your home insurance binder from an insurance agent or broker. Your insurance company may even be able to send it directly to your lender.^[2]

Do home insurance binders expire?

A home insurance binder is a temporary document that serves as proof to your mortgage underwriter that your home — the mortgage company’s collateral — has sufficient protection. These contracts typically last for 30 to 90 days, so it’s smart to confirm the expiration date with your insurance company.^[3]

Once your mortgage lender underwrites your home loan and you’ve closed on your home, you’ll likely receive a formal policy with a declaration page summarizing your coverage.

Homeowners insurance binder FAQs

Homeowners insurance binders are a key piece of documentation in the home purchase process. The following information can help answer your remaining questions about how home insurance binders work.

What is a binder in homeowners insurance?

A homeowners insurance binder is a temporary contract issued before a formal home insurance policy goes into effect. This binder can serve as proof of coverage for your lender.

What must a binder for a new homeowners policy include?

A homeowners insurance binder typically includes the information about the named insureds, insurance company, policy term, type of policy, covered perils, coverage amounts, deductible amount, and effective date.

How can you get a binder from your insurance company?

You can purchase homeowners insurance coverage from an insurance agent and request that they send you a copy of your insurance binder. Note that some insurers will provide a formal policy instead, while others will give you the binder until your formal insurance policy goes into effect once you close on your home.

What is the difference between an insurance binder and a declaration page?

A homeowners insurance binder is a temporary contract that borrowers generally provide to their mortgage lenders as proof of insurance during the underwriting process. By contrast, a declaration page is part of a formal document summarizing your official policy that you receive from an insurance company after a real estate closing.

How long is a homeowners insurance binder valid for?

Homeowners insurance binders are typically valid for one to three months. After that, you can use your insurance declaration page and formal policy instead.

Sources

Progressive. "What is an insurance binder?."
Chase. "Insurance binders explained."
Hippo. "Understanding What a Homeowners Insurance Binder Is."

Methodology

Insurify data scientists analyzed rates from more than 180 home insurance companies sourced directly from Insurify’s partner companies and Quadrant Information Services. Rates span all 50 states and Washington, D.C., and quote averages represent the mean price for a given coverage level and geographic area. To ensure data reliability, only insurers meeting minimum quote thresholds were included in the analysis.

Unless otherwise specified, quoted rates reflect the average cost for homeowners with no prior claims and good credit with a home construction year of 1980. The default coverage assumptions include:

Default Coverage Assumptions

Dwelling coverage: $300,000
Deductible: $1,000
Personal property limit: $25,000
Liability limit: $300,000

Additional data points beyond these default values are sourced from Insurify’s proprietary database. Rates are updated monthly.

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Writer: Jess UllrichFreelance Insurance Writer

Qualifications:

10+ years in personal finance writing and editing
Investopedia, Wall Street Journal, and The HuffPost

Jess is a personal finance writer who's been creating financial and business content for over a decade. Her work is published on Investopedia, MoneyWise, NextAdvisor, The HuffPost, and more. Prior to freelancing full-time, Jess was an editor at Investopedia, The Balance, and FinanceBuzz. Connect with her on LinkedIn.

Jess has been a contributor at Insurify since September 2022, and has written hundreds of empowering, informative articles on insurance topics.

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Editor: Katie PowersLicensed P&C Agent, Senior Insurance Editor