Hawaii Adjuster's Exam Practice 2025 - Free Adjuster Exam Practice Questions and Study Guide

The document that serves as proof that an insurance policy is active is referred to as a Certificate of Insurance. This certificate is a concise summary of the policy, outlining the coverage details, the insured parties, and the effective dates of coverage. Essentially, it notifies interested parties, such as creditors or other individuals needing reassurance, that the named insured holds a valid insurance policy at the time specified.

The Certificate of Insurance is particularly useful in various situations where third parties require evidence of coverage, such as when entering into contracts or leases, thereby ensuring compliance with contractual obligations. This document can be critical for verifying coverage without needing to disclose the full policy details.

In contrast, while an Insurance Binder also serves as temporary proof of insurance, it is not a permanent document and usually covers a short period before the official policy is issued. Proof of Loss is a document submitted by the insured to the insurer detailing the extent of a loss, while the Policy Declaration summarizes the key facts and coverage specifics within the policy, but it does not serve the same purpose as a Certificate of Insurance in terms of providing proof of active coverage to third parties.