Elephant insurance What is a binder for auto insurance? Most auto insurance consumers don’t understand what goes on after they submit an application. When you go to an auto insurance agent’s office and buy same-day cheap auto insurance coverage, it’s easy to assume the process is straightforward. However, there is actually a lot of work that happens behind the scenes. Once you apply, the insurance company initiates a process to assess the risk of each driver. During this process, the insurance company gives applicants a temporary binder letter, so that you are not without any form of protection. What is an auto insurance binder letter? It’s temporary evidence of insurance that covers your driving while you’re waiting for the underwriting process before your formal insurance policy is active. An insurance binder may also be called an insurance policy binder, title binder, interim binder, insurance card, or certificate of insurance. Even though the binder is only an interim certificate of insurance, it is a fully enforceable contract of insurance.