What is used to provide temporary insurance coverage until a formal policy is issued?

A binder is a temporary agreement that provides immediate insurance coverage until the formal insurance policy is issued. It serves as a provisional document that binds the insurer to provide coverage for a specified period, allowing policyholders to have protection in place while the official policy is being finalized or underwritten.

This is particularly useful in situations where quick coverage is necessary, such as during a real estate transaction or when immediate risk needs mitigation. For example, if someone purchases a new home and wants to ensure that they are protected from potential damages before the full policy is processed, a binder would offer that necessary coverage.

The other options have different functions: a quote is simply an estimate of the premium based on the details provided by the applicant; an endorsement is used to modify the terms of an existing insurance policy; and policy issuance refers to the formal process of finalizing and delivering the actual insurance policy document. None of these options fulfill the same immediate function of providing temporary coverage as a binder does.