An auto insurance binder is a temporary coverage with immediate effect and a very restricted time span.
When you apply for a new policy, you won’t get it immediately. The insurer has to go through the so-called underwriting process where they analyze your credentials and decide whether or not to insure you and, if so, how much to charge you. There are cases, however, when you will need insurance immediately, and this is when you will get this temporary form of insurance.
There are several scenarios where you are going to need an auto insurance binder.
The binder may be issued verbally or in writing. Once the insurance agent has entered the information in the system you should, technically, be safe to drive. You are, however, recommended to get a written agreement if you have the option, or at least a written confirmation (like a printed email) just to be on the safe side and not get into “he said, she said” kind of situation.