Binders Keep Us out of a Bind

Written by Posted On Wednesday, 06 July 2016 11:16

Human behavior can be very interesting.  When making large purchases such as a car, we put weeks, even months of research into it.  We hop on the internet and begin our searches.  We take detailed notes and have conversations with our significant others.  We talk to dealers and take test drives.  Maybe we should do the same when it comes to auto insurance.  


New car fever!  We all get it from time to time.  We just get tired of driving the same old set of wheels or maybe the mechanic is spending more time with your car then you are.   So you go online and poke around at what's out there.  Look at the cars parked out front at the dealerships on the way to work.  Before long the fever intensifies and you have compiled your list of must have cars.  Saturday morning, you head out to do some test drives.   Soon you feel the anticipation begin to build as your list of dream vehicles nears completion.  You fill out paperwork, apply for the loan and voila, you are the proud owner of a new car.   The dealer tells you are all set, the only thing left to do is call your insurance agent to obtain the binder.  What?!? Huh?!?    Didn't even think about that.  It's Saturday, no one is going to answer the phone.  You plead with the dealer, "it's only for a few days and I will get it all taken care of on Monday".  The dealer feels for you but isn't about to take the risk and besides it's the law.   Feeling fully dejected, you leave the keys to your brand new car and mutter a sheepish "I will be back Monday evening."

There are various ways of obtaining a binder and they differ depending on how and where you buy your new vehicle. 

If you purchase car insurance online, you may find that your provider instantly offers you the option to print out a proof of insurance while informing you that this proof of insurance is temporary.  This will act as your binder.   You can expect your insurance agent to send you a finalized policy and proof of coverage within the next week or so.

Buying the vehicle in person- Your insurance agent may give you a verbal binder.  However, it is strongly suggested to ask for a written binder.  Most states require you to carry a proof of insurance in your vehicle at all times.  

The best way to avoid all this hassle is to call the agent who sold you your current policy and advise them that you are in the market for a new car. If you know the make and model your agent can add it to your existing policy with a binder that covers you until your policy can be finalized.  You will want to call your agent after buying the car to make sure they have all the necessary information to properly cover you.  While this is something that should be done quickly, you can choose to wait, as some insurance agencies have grace periods that vary.  You definitely want to inquire with your agent about that beforehand.

First car, never had insurance?

The search for your new car has been meticulous.  You have compared reviews, found the best financing and you're ready to sign on the dotted line.  Before you head down to the lot, take the same time and care in finding the right insurance agency.  Make sure the agent you choose can sell you a binder up front so you can drive the car off the lot.  Another option is to ask the dealer for recommendations.  If you already have a different policy such as a homeowners, renters or a life policy, check with the agent who manages those and see if they offer auto insurance.  Typically when you carry more than one policy with a company they will offer you a discount.  

The last option and the one no one likes to hear is to simply leave the car at the dealership.

While this may feel impossible and you are just dying to drive it home right away, it is in your best interest to come back and pick it up when you have your insurance all set.  It's the prudent decision, since you never know what could happen between the dealership and your house.  Any kind of collision or theft would be solely your responsibility. That alone would put the most of us in an untenable financial situation.  

While it is usually not mandated, Gap insurance is highly recommended.  Gap insurance covers the difference between what you paid for the car and what it would actually be valued at in the case of a loss.  Without Gap insurance you would be required to come up with this money yourself. 

Just remember coverage protects more than just your car, it protects you and your wallet.  Call your agent today to see how they can help you have a flawless car buying experience.




For more information from the experts over at G&N Insurance, visit


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