Any other party needing proof that the insured is covered for their actions that may lead to physical harm to persons or property is guaranteed coverage by a certificate issued by the insurer. Certificates deal more with the liability aspect of the contract, not the physical damage coverage of property. The contract’s clauses spell out the protection of the physical damage of the object they own until the loan is satisfied.Ī certificate is also a form of proof that insurance exists but is not intended for a lender. The lender then gets a copy of the contract with them listed as the lienholder. It usually lasts about a month, giving enough time to the insurer to underwrite the risk and issue a policy. What is the difference between a binder and a certificate?Ī binder is a temporary proof of insurance issued at the beginning of an insurance contract to satisfy a lender’s needs.
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