Binder Letter

A “binder letter” is a document issued by an insurance company or a title company that provides temporary proof of coverage or commitment to insure a property or transaction. In real estate, a binder letter often serves as interim evidence that the buyer has obtained insurance or that a title insurance policy will be issued once the transaction is finalized.

The binder letter typically outlines the terms and conditions of the insurance or coverage and is used to satisfy contractual obligations, such as those in a purchase agreement, while the formal policy is being prepared. It is a temporary measure, usually valid for a short period until the official documents are completed and delivered.