ACORD 28 vs ACORD 27: When to Use Each Certificate of Insurance Form

Understanding the difference between ACORD 28 and ACORD 27 certificates is crucial for insurance professionals and compliance managers. These standardized forms serve distinct purposes in the insurance industry, and knowing when to use ACORD 28 vs ACORD 27 can save you time, prevent compliance issues, and ensure proper coverage verification. This comprehensive guide breaks down each form's purpose, structure, and appropriate use cases to help you navigate certificate of insurance management with confidence.

Table of Contents

• What Are ACORD Certificates?
• ACORD 28: Evidence of Property Insurance
• ACORD 27: Evidence of Property Insurance (Condensed)
• Key Differences Between ACORD 28 vs ACORD 27
• When to Use ACORD 28
• When to Use ACORD 27
• Common Mistakes to Avoid
• Best Practices for Certificate Management
• Frequently Asked Questions

What Are ACORD Certificates?

ACORD (Association for Cooperative Operations Research and Development) certificates are standardized forms used throughout the insurance industry to provide evidence of insurance coverage. These documents serve as proof that a policy has been issued and outline key information about the coverage provided.

While many people are familiar with the ACORD 25 (Certificate of Liability Insurance), the ACORD 28 and ACORD 27 forms specifically address property insurance coverage. Understanding the differences between ACORD 28 vs ACORD 27 is essential for proper insurance documentation and compliance.

The Purpose of Insurance Certificates

Insurance certificates serve several important functions:

• Providing verification that insurance coverage exists
• Documenting policy limits and coverage types
• Establishing compliance with contractual insurance requirements
• Serving as summary documents of more detailed insurance policies

It's important to note that certificates are not insurance policies themselves but rather evidence that policies have been issued. They do not amend, extend, or alter the coverage provided by the actual insurance policies.

ACORD 28: Evidence of Property Insurance

The ACORD 28 form, officially titled "Evidence of Property Insurance," is a comprehensive document that provides detailed information about property insurance coverage. This form is designed to offer a thorough overview of property insurance policies.

Key Components of ACORD 28

The ACORD 28 form includes the following sections and information:

• Producer and company information
• Insured's name and mailing address
• Property information (location, description)
• Coverage information (type of insurance, limits, deductibles)
• Detailed coverage sections for various perils
• Special conditions/other coverages
• Cancellation notice provisions
• Additional interest information (mortgagee, loss payee, etc.)

The ACORD 28 provides space for extensive details about property coverage, including specific coverages for building, personal property, business income, and extra expense. It also includes sections for additional coverages such as equipment breakdown, earthquake, and flood insurance.

ACORD 27: Evidence of Property Insurance (Condensed)

The ACORD 27 form is a condensed version of the Evidence of Property Insurance document. As the name suggests, it provides the same basic function as the ACORD 28 but in a more streamlined format with less detail.

Key Components of ACORD 27

The ACORD 27 form includes:

• Producer and company information
• Insured's name and address
• Basic property information
• Summary of coverage types and limits
• Policy effective dates
• Additional interest information

The ACORD 27 provides less space for detailed coverage information and is designed for situations where only basic evidence of property insurance is needed. It omits many of the specific coverage sections found in the ACORD 28.

Key Differences Between ACORD 28 vs ACORD 27

Understanding the differences between ACORD 28 vs ACORD 27 is essential for selecting the appropriate form for your specific needs. Here's a detailed comparison:

Level of Detail

• ACORD 28: Provides comprehensive details about property coverage, including specific coverage types, limits, and conditions. It includes sections for various perils and additional coverages.
• ACORD 27: Offers a condensed summary of property insurance with basic information about coverage types and limits. It lacks the detailed breakdown found in ACORD 28.

Form Length and Complexity

• ACORD 28: Typically a two-page form with multiple sections and fields for detailed information.
• ACORD 27: Usually a single-page document with fewer fields and a more streamlined format.

Coverage Information

• ACORD 28: Includes specific sections for building coverage, personal property, business income, extra expense, and various optional coverages like equipment breakdown, earthquake, and flood.
• ACORD 27: Provides basic coverage information without the detailed breakdown of specific coverages and endorsements.

Additional Interest Information

• ACORD 28: Contains detailed sections for additional interests, including mortgagees, loss payees, and additional insureds, with space for multiple entries.
• ACORD 27: Has limited space for additional interest information, typically accommodating fewer entries with less detail.

When to Use ACORD 28

The ACORD 28 form is the more comprehensive option in the ACORD 28 vs ACORD 27 comparison. Here are specific scenarios when you should use the ACORD 28 form:

Complex Property Insurance Requirements

Use ACORD 28 when dealing with properties that have complex insurance requirements or multiple coverage types. For example, commercial buildings with specialized equipment, multiple structures, or unique risk factors benefit from the detailed coverage documentation provided by ACORD 28.

Mortgage and Lending Requirements

Most mortgage lenders and financial institutions require the ACORD 28 form because it provides comprehensive evidence of property insurance coverage. This is particularly important for high-value commercial properties or properties with complex financing arrangements.

Multiple Additional Interests

When a property has multiple mortgagees, loss payees, or additional insureds, the ACORD 28 provides adequate space to list all these parties with their respective interests clearly defined. This is crucial for properties with complex ownership or financial structures.

Special Coverage Requirements

If the property requires special coverages such as flood insurance, earthquake protection, equipment breakdown, or business interruption coverage, the ACORD 28 allows for detailed documentation of these specific coverages and their respective limits.

For example, a manufacturing facility with expensive machinery would benefit from using ACORD 28 to document equipment breakdown coverage details that wouldn't fit on the condensed ACORD 27 form.

When to Use ACORD 27

The ACORD 27 form serves as a condensed alternative in the ACORD 28 vs ACORD 27 comparison. Here are specific situations when the ACORD 27 form is the appropriate choice:

Basic Property Insurance Verification

When you only need to provide basic evidence that property insurance exists, the ACORD 27 is sufficient. This might apply to simpler commercial properties or situations where detailed coverage information isn't required by the requesting party.

Routine Compliance Documentation

For routine compliance situations where a third party simply needs confirmation that property insurance is in place, the ACORD 27 provides the necessary information without excessive detail. This is common in standard lease agreements or basic vendor contracts.

Residential Properties

The ACORD 27 is often sufficient for residential properties with straightforward insurance requirements. Since residential properties typically have less complex insurance structures than commercial properties, the condensed format works well in these cases.

Temporary or Preliminary Documentation

In situations where temporary or preliminary evidence of insurance is needed before more detailed documentation is prepared, the ACORD 27 can serve as an initial verification. This might apply during the early stages of a property transaction or contract negotiation.

For instance, a small business leasing office space might initially provide an ACORD 27 to show they have property insurance, with the understanding that more detailed documentation may be required later.

Common Mistakes to Avoid When Using ACORD 28 vs ACORD 27

When dealing with ACORD 28 vs ACORD 27 forms, several common mistakes can lead to compliance issues or coverage verification problems. Here are key pitfalls to avoid:

Using the Wrong Form for the Situation

One of the most common mistakes is choosing the inappropriate form for your specific requirements. Using an ACORD 27 when a lender explicitly requires an ACORD 28 can delay loan processing or lead to rejection of the documentation. Conversely, providing an ACORD 28 when only basic verification is needed may share unnecessary details.

Incomplete Information

Both forms require specific information to be valid. Common omissions include:

• Missing policy numbers or effective dates
• Incomplete property description or location information
• Failing to list all required additional interests
• Omitting coverage limits or deductible information

These omissions can result in rejected certificates and delayed business processes.

Incorrect Additional Interest Information

Misclassifying additional interests (confusing mortgagees with loss payees, for example) or listing them with incorrect information can create serious problems. Each interest type has different rights under the insurance policy, so accuracy is crucial.

Misrepresenting Coverage

Another serious mistake is indicating coverage that doesn't actually exist or misrepresenting coverage limits. This can happen when producers try to satisfy a requirement without confirming the actual policy details, potentially creating legal liability issues.

Outdated Forms

Using outdated versions of ACORD forms can lead to compliance problems. ACORD periodically updates these forms to reflect industry changes and regulatory requirements. Always use the most current version of the forms to ensure compliance.

Best Practices for Certificate Management

Managing ACORD 28 vs ACORD 27 certificates effectively requires systematic approaches. Here are best practices to streamline your certificate management process:

Understand Requirements Clearly

Before issuing or requesting certificates, clearly understand what form is required and why. Review contracts, loan documents, or lease agreements to identify specific insurance documentation requirements. When in doubt, ask the requesting party which form they need rather than making assumptions.

Implement Digital Certificate Management

Modern certificate management systems like CoverLedger can automate the tracking, verification, and renewal of insurance certificates. These systems can:

• Store certificate data in searchable formats
• Send automatic renewal reminders
• Flag compliance issues or missing information
• Generate reports on certificate status
• Provide secure access to certificates for all stakeholders

Establish Clear Internal Processes

Create standardized procedures for handling both ACORD 28 and ACORD 27 forms. This should include:

• Who is authorized to request or issue certificates
• How certificates should be reviewed for accuracy
• Documentation of certificate issuance and receipt
• Procedures for handling non-compliant certificates

Regular Auditing and Review

Conduct periodic audits of your certificate management process to ensure compliance and identify areas for improvement. This includes:

• Reviewing certificates for accuracy and completeness
• Verifying that the appropriate form (ACORD 28 vs ACORD 27) is being used
• Checking that certificates haven't expired
• Confirming that all required additional interests are properly listed

Staff Training and Education

Ensure that all staff involved in certificate management understand the differences between ACORD 28 vs ACORD 27 and when each should be used. Regular training can help prevent common mistakes and improve efficiency in certificate processing.

Key Takeaways: ACORD 28 vs ACORD 27

• ACORD 28 is the comprehensive form providing detailed property insurance information, ideal for complex properties and mortgage requirements.
• ACORD 27 is the condensed version suitable for basic verification and simpler property insurance documentation.
• Choose ACORD 28 when detailed coverage information, multiple additional interests, or special coverages need documentation.
• Use ACORD 27 for routine compliance, residential properties, or situations requiring only basic verification.
• Common mistakes include using the wrong form, incomplete information, and misclassifying additional interests.
• Best practices include clear understanding of requirements, digital certificate management, established processes, regular auditing, and staff training.

Frequently Asked Questions

What is the main difference between ACORD 28 vs ACORD 27 forms?

The main difference between ACORD 28 vs ACORD 27 is the level of detail provided. ACORD 28 is a comprehensive two-page form that offers detailed information about property insurance coverage, including specific coverage types, limits, and conditions for various perils. ACORD 27 is a condensed single-page form that provides basic evidence of property insurance with summary information about coverage types and limits, without the detailed breakdown found in ACORD 28.

Can I use ACORD 27 instead of ACORD 28 for mortgage requirements?

In most cases, mortgage lenders specifically require the ACORD 28 form because they need detailed information about property coverage to protect their financial interest. Using an ACORD 27 when a lender has explicitly requested an ACORD 28 will likely result in rejection of the documentation. Always check your lender's specific requirements before submitting any certificate, as some lenders may accept ACORD 27 for certain types of loans or properties, though this is less common.

How often do I need to update ACORD 28 or ACORD 27 certificates?

Both ACORD 28 and ACORD 27 certificates should be updated whenever there are significant changes to the insurance policy, such as coverage modifications, limit changes, or policy renewals. At minimum, new certificates should be issued annually upon policy renewal. Some contracts or loan agreements may specify more frequent verification requirements. It's best practice to establish a systematic approach to certificate renewal tracking, which can be efficiently managed through automated systems like CoverLedger.

Are ACORD 28 and ACORD 27 forms legally binding documents?

No, neither ACORD 28 nor ACORD 27 forms are legally binding insurance policies. They are informational documents that provide evidence that insurance coverage exists, but they do not amend, extend, or alter the coverage provided by the actual insurance policies. Most ACORD forms contain disclaimer language stating they are issued as a matter of information only and confer no rights upon the certificate holder. The actual insurance policy remains the binding contract that determines coverage.

How can I efficiently manage multiple ACORD certificates for different properties?

Managing multiple ACORD certificates across different properties can be challenging without a systematic approach. The most efficient method is to implement a specialized certificate management system like CoverLedger, which can automate tracking, verification, and renewal processes. These systems centralize certificate data, send automatic renewal reminders, flag compliance issues, and provide secure access to certificates for all stakeholders. For organizations managing numerous certificates, these automated solutions significantly reduce administrative burden and compliance risks.

Conclusion

Understanding the differences between ACORD 28 vs ACORD 27 forms is essential for proper insurance documentation and compliance. The ACORD 28 provides comprehensive details about property insurance coverage, making it ideal for complex properties, mortgage requirements, and situations requiring detailed documentation. The ACORD 27 offers a condensed alternative suitable for basic verification needs, residential properties, and routine compliance situations.

By selecting the appropriate form for your specific needs and following best practices for certificate management, you can ensure compliance with insurance requirements while streamlining administrative processes. Remember that efficient certificate management is not just about paperwork—it's about protecting financial interests and ensuring proper coverage verification.

For organizations managing multiple certificates, implementing a specialized certificate management system like CoverLedger can significantly reduce administrative burden and compliance risks. These systems automate tracking, verification, and renewal processes, allowing you to focus on your core business activities with confidence that your insurance documentation is properly managed.

See how CoverLedger works - schedule a demo today to learn how our automated insurance compliance solution can streamline your certificate management process.