An auto insurance binder is a temporary proof of insurance coverage provided by an insurance company until the actual policy is issued. It is typically used when a person purchases a new vehicle and needs immediate coverage before the policy documents are finalized. The binder serves as a temporary contract between the insured and the insurance company, outlining the coverage details, policy limits, and duration of the binder. It is important to note that the binder is only valid for a specific period, usually 30 days, and will expire once the actual policy is issued. The binder is often required by lenders or leasing companies to ensure that the vehicle is adequately insured during the interim period. It is crucial for individuals to review the terms and conditions of the binder carefully to understand the coverage provided and any limitations or exclusions. It is also essential to contact the insurance company to obtain the actual policy documents as soon as possible to ensure continuous coverage.