Often, a car lender or dealer will require proof that your car is insured before funding the loan or allowing you to drive the vehicle away from the lot. The practice of securing the vehicle’s value started the first time a bank lent money to buy one. Getting a borrower to continue making monthly payments after a car is totaled is near impossible. The insurance company would take the place of a borrower and pay back the lender. The temporary proof we send to the lender obligating the insurance company to pay is called a binder. A binder acts as a stand-in until the risk is adequately underwritten and a policy is issued.