All of the following describe a binder EXCEPT?

A binder is a temporary agreement between the insurer and the insured, which provides evidence that insurance coverage is in place before a formal policy is issued. It is important to understand the characteristics of a binder to clarify why one of the descriptions does not fit.

A binder can be either oral or written, indicating flexibility in how it can be communicated and established. This aspect is crucial as it allows insurance to be effective without needing a written policy immediately.

The statement that a binder cannot be canceled is inaccurate. In reality, binders can be canceled by either party, which aligns with the nature of temporary agreements. This flexibility is essential, as it allows the insurer to reassess the risk before finalizing the policy and provides the insured with a way to make adjustments to their coverage if necessary.

Additionally, a binder typically places insurance coverage into effect prior to the issuance of the actual policy, ensuring immediate protection for the insured. It also aims to afford the same coverage as the policy that will be issued, maintaining consistency and functionality until the final contract is in place.

Ultimately, the description that a binder cannot be canceled does not accurately reflect the nature of binders, making it the correct choice for the question asked.