They can’t just cancel your policy at will with no notice. The insurers must give you a specified period of time to find new coverage if they decide not to continue your policy. Unless something changes, up to the point of the change, the proof of insurance is the same for their purposes. Mortgage lenders treat homeowners insurance binders the same as a fully executed policy. As long as you didn’t misrepresent yourself during the application process, you’re likely okay. So if your claim during this period was bigger or fell into written exclusions, coverage would be executed accordingly. This temporary proof of coverage is still based on payment.

Most states allow a 60-day window for an insurer to underwrite a policy and verify they are interested in maintaining coverage. If something happens before they make a final decision, though, it would be covered as outlined in the insurance binder. This could result in an increase in your insurance premium or even in your insurance company cancelling the policy in extreme cases. You may have a guarantee of coverage “for the time being.” You see, insurance companies can issue a policy, and then go back and check the “facts” we provided. What goes into the process of writing an insurance policy?