West Virginia Property and Casualty Licensing Practice Exam

A binder for insurance coverage may not cover a period in excess of how many days?

1. 30 days

2. 60 days

3. 90 days

4. 120 days

The correct answer is: 90 days

A binder for insurance coverage is a temporary agreement that provides immediate protection while the insured's formal policy is being finalized. In West Virginia, a binder typically cannot extend beyond 90 days. This limitation is established to ensure that the insurance process moves forward efficiently and to avoid any confusion regarding coverage. After this temporary period, the insurance company must formalize the policy, or coverage will lapse. The choice indicating that a binder may not cover a period in excess of 90 days is intended to underline the necessity of completing the policy underwriting process within a specific timeframe to protect both the insurer and the insured. If a binder were allowed to extend much longer, it could lead to prolonged uncertainty in coverage status, complicating claims and administrative processes. Other durations suggested, such as 30, 60, or 120 days, do not align with the legal framework governing insurance binds in West Virginia, thereby confirming that 90 days is the correct answer.