How to Analyze Insurance Documents in a Fire Investigation:
Binder

by
Joseph Toscano
VP, Fire Investigation Specialist
American Re-Insurance Co.

An insurance binder is temporary coverage pending the issuance of an actual policy. It is effective until the policy applied for is approved and issued or is declined by the insurance company. The ginder is usually effective for 30 or 60 days. It is typically a single form without any of the substantive terms and conditions of an actual policy of insurance, containing only basic information about the coverages provided by the binder. The information in the binder can be useful when compared to the application and known observations you have made about the property, and can figure prominently in an investigation of a fire that occured while the binder was in force (i.e., before the application was approved), especially if the outcome of the application was in doubt.

Annotations are found below the form. You may click on any number on the form to hop directly to its annotation.

1. The exact date and time when coverage under the binder becomes effective is stated here. It is usually the same day the insured applies for the policy.

2. A short description of the property to be insured is contained here.

3. The type of property and its location are listed.

4. The amount of insurance coverage provided under the binder is stated here, usually the amount applied for by the insured.

5. Any special conditions of coverage provided under the binder is stated here, usually the amount applied for by the insured.

6. Any mortgage holder on the insured property should be disclosed here.

7. A loss payee having a secured interest in any of the property insured under the binder should be disclosed here.

8. This lists any other person or entity whose interest is insured under the binder, as to any portion of the coverages.

Reprinted with permission from the author.

This article appears courtesy of Munich Re America, Inc. formerly American Re-Insurance Company.