Arkansas Insurance Adjuster Practice Exam

An oral or written statement providing temporary insurance coverage until an insurance policy can be issued is called a:

1. Policy

2. Binder

3. Guarantee

4. Warranty

The correct answer is: Binder

A binder is a temporary coverage that is provided until an insurance policy can be issued. It serves as a written or oral statement that guarantees insurance coverage in the interim period. Option A is incorrect because a policy is a written contract that outlines the terms and conditions of an insurance coverage. Option C is incorrect because a guarantee is a promise to provide a desired outcome, while a binder is a temporary solution until an insurance policy can be finalized. Option D is incorrect because a warranty is a guarantee of the condition or quality of a product, not a temporary insurance coverage.