Binder ceases at the earliest of which events?

Binder ceases at the earliest of which events?

• A. Policy expiration
• B. Cancellation of the binder by the insurer
• C. Insured cancellation
• D. Any of the above

Answer: (D)

A binder is a temporary form of coverage that remains in effect only until one of a few ending events occurs. It ends as soon as the first of those events happens, not later than that moment. If the policy actually issues before any other event, the binder ends at that issuance; if the insurer cancels the binder first, it ends then; if the insured cancels before expiration, it ends then. Because any of these events can occur first, the binder ceases at the earliest of the listed possibilities. That’s why the best answer is that it could be any of the above.

A binder is a temporary form of coverage that remains in effect only until one of a few ending events occurs. It ends as soon as the first of those events happens, not later than that moment. If the policy actually issues before any other event, the binder ends at that issuance; if the insurer cancels the binder first, it ends then; if the insured cancels before expiration, it ends then. Because any of these events can occur first, the binder ceases at the earliest of the listed possibilities. That’s why the best answer is that it could be any of the above.