Legal Definitions - binding receipt

A binding receipt is a document that serves as proof of temporary insurance coverage until a formal policy is issued. It is also known as a binder.

For example, if you purchase a new car and need immediate insurance coverage, your insurance agent may issue a binding receipt that provides temporary coverage until your formal policy is issued.

Another example is when a homeowner purchases a new home and needs insurance coverage before the formal policy is issued. The insurance company may issue a binding receipt to provide temporary coverage until the formal policy is ready.

These examples illustrate how a binding receipt can provide temporary insurance coverage until a formal policy is issued.