Florida Insurance Claims Adjuster License Practice Exam 2025 - Free Insurance Claims Adjuster License Practice Questions and Study Guide

Question: 1 / 400

What purpose does a binder serve in insurance?

It acts as a temporary contract until the policy is issued

A binder is a temporary contract that is given to the policyholder until the actual insurance policy is issued. It acts as a confirmation that coverage has been secured and provides evidence of the agreement between the insurer and the policyholder. Option B is incorrect because binders do not bind the policyholder to a rate increase. Option C is also incorrect as the binder only includes the basic terms and conditions of the insurance coverage, but may not include all details. Lastly, option D is incorrect because binders are temporary and are replaced by the official insurance policy, which permanently seals the agreement.

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It binds the policyholder to a rate increase

It compiles the insurance terms and conditions

It permanently seals the insurance agreement

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