The term "blanket coverage" refers to a category of business insurance policies covering multiple properties that are similar in nature but not at the same location. For example, a franchise restaurant owner who operates several sandwich stores around a city may purchase a single insurance policy covering all locations. Blanket insurance can also be purchased to protect non-real estate property such as artwork, mortgage investments or personal property.
Blanket property insurance coverage allows a policyholder to insure multiple properties from loss and liability under the same policy. Blanket health insurance also allows a policyholder to insure someone who may not qualify as a dependent.
Blanket vs. Specific Property Coverage
Property insurance can generally be divided into two categories: blanket and specific coverage. Under blanket insurance coverage, the maximum amount payable under the policy is divided among all damaged properties. Therefore, if four covered buildings are destroyed in a fire, the insurance would pay an amount for each property until the total policy limit is exhausted.
Under specific insurance, the policy holder designates a single property to be covered for a designated purpose. For example, the policy would state that one restaurant is covered for $50,000 in the event of flooding. If the restaurant burns down, the policy would not provide coverage.
Multiple Property Payout Limits
The payout amount for multiple properties covered under a blanket coverage policy can either be equal among all items or set at different limits. Under a blanket limit, an art dealer who suffers a loss of three paintings under a $300,000 policy would receive $100,000 for each piece.
Under a scheduled limit policy, the payout amount is set according to a predetermined rate for each property. For example, a landlord with two buildings and a $750,000 policy could set one building's payout limit at $250,000 and the payout limit for a larger building at $500,000.
Types of Covered Property Incidents
A blanket insurance policy typically covers all types of loss and liability regarding the insured property. Therefore, for a business property, the policy may cover fire, personal injury liability, floods, earthquake damage and theft of merchandise contained within the building.
Benefits of Blanket Property Insurance
Restaurant owners may find the flexibility that blanket coverage provides to be helpful if they frequently need to move expensive equipment between locations. Under a blanket policy, the business would not need to adjust the policy to reflect these changes. Financial investors could use blanket coverage to protect a portfolio of mortgage investments from certain losses.
Blanket Health Insurance
Another type of blanket coverage is for health insurance. This type of coverage is highly customizable to meet the needs of individual policyholders. You may want to provide medical insurance for a parent who lives in your home (or in a separate home). Regardless of whether you can legally claim the parent as a dependent (and include the parent on your existing insurance policy), a blanket health insurance policy allows you to provide coverage, regardless of your parent's tax designation.
Do You Need Blanket Insurance?
If you own multiple properties, you may want to consider purchasing blanket property insurance coverage. And if you have extensive health insurance needs, or if you wish to provide coverage for someone who you do not claim as a dependent, a blanket insurance policy may work best to customize your specific needs. But shop around and compare different policy offerings and rates because you may be able to keep your existing individual insurance policy and simply add riders to expand the coverage.
Kevin Owen has been a professional writer since 2005. He served as an editor for the American Bar Association's "Administrative Law Review." Owen is an employment litigator in the Washington D.C. metropolitan area and practices before various state and federal trial and appellate courts. He earned his Juris Doctor from American University.