P&CIllinoismedium
Under Illinois law, an oral binder for property and casualty insurance issued by an authorized Illinois producer:
Is valid and binding on the insurer for a limited period pending issuance of a written policy or binder
BIs never valid and is unenforceable
CRequires notarization to be effective
DMust be approved by the Director of Insurance within 24 hours
Why this is the answer
Illinois courts enforce oral binders for property and casualty insurance (Marino v. Firemen's Insurance Co., 1952); 215 ILCS 5/143.13 only defines terms for the cancellation sections. An oral binder is a temporary contract of insurance that incorporates all the usual terms of the insurer's policy form for the class of risk. It typically runs until a written policy or formal binder is issued, or until a stated period elapses. Oral binders are commonly used in auto, homeowners, and commercial property contexts where coverage must attach immediately, such as at vehicle purchase or property closing.
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