Blanket Insurance: A Comprehensive Coverage Solution

Blanket insurance can be a bit misleading to someone unfamiliar with the industry. There are many types of get insurance policies that cover an array of items. Multiple pieces of property, more than one location, or even personal property spread amongst multiple locations are all exampled of blanket insurance.

What is Blanket Insurance? 

Blanket insurance is a type of insurance policy that covers more than one item, such as a house, and can apply to multiple things, such as multiple properties. A blanket insurance policy can have multiple locations, buildings, or pieces of valuable personal property.

How Does Blanket Insurance Work? 

Blanket insurance policies provide a limit that will cover all of the items that fall under the metaphorical “blanket.” As mentioned before, this could be multiple locations, buildings, or even personal property at multiple locations. 

For example, if you have three buildings on one policy as a blanket for $500,000, that is the most the insurance would pay out if all three buildings should suffer a loss. The positive to this is if you remodeled one and forgot to update the replacement cost, you can use the total $500,000 limit at one building because it is blanket. 

It is essential to understand that, like a standard insurance policy, a blanket policy will also have a deductible and co-insurance. That means you must carry a minimum of whatever co-insurance is listed, usually 80% or 90% of the replacement cost. This includes anything that is to be covered under the blanket. 

What Types of Blanket Insurance Are There, and What Do They Cover? 

While mostly heard of regarding commercial property, there are several types of blanket insurance. Many scenarios can justify the need for blanket insurance and could be beneficial depending on your situation. 

Homeowners, Condo, and Rental Insurance

For homeowners, condo, and rental policies, blanket insurance is an excellent option for those who want to increase the limits for certain types of personal property. A standard policy will have specific limits for things like art, jewelry, and other valuables. Adding a blanket endorsement essentially increases the limits for this personal property.

Usually, these types of personal property have pretty low sublimits and are not included in your personal property amount. For example, these are some typical sublimits you will see for theft of these types of personal property:

Jewelry, watches, and furs: $1,500

Business property (be careful with having a business in your home, as homeowners, condo, and renters policies often exclude this): $2,500

Guns: $2,500

Silverware or goldware: $2,500

With the limits used above, if you added a blanket endorsement to your policy, it would increase the total limit for any of those categories. For example, if your limit was increased to $9,000 with a blanket policy and someone stole $8,000 worth of jewelry from your home, it would be covered entirely. Without the blanket endorsement, you would only have $1,500 in coverage. 

Auto Insurance

In theory, blanket auto insurance does not exist. Comprehensive car insurance covers your car in the event of theft, vandalism, storm damage, or similar events. However, this type of policy will only pay for vehicle repairs. Theft or damage to items inside your car is typically not covered by your car insurance. 

Personal property contained in your car is usually covered by your homeowner’s or renter’s insurance. If you have a cell phone or computer in your car and someone breaks in and takes them, your homeowners, or similar, policy should provide coverage for them under the blanket personal property limit. 

Commercial Property Insurance 

Commercial property insurance is the most common place to see blanket insurance. That is because you can cover multiple locations, buildings, and business personal property items on a blanket basis. This is an excellent option for landlords or businesses with multiple locations and no time to call the insurance company at every turn to make updates.

It is important to note that usually, they have to be similar operations if you are covering multiple locations for the same business. For example, if you have 4 restaurants, you can cover each of them under one limit, but if you purchase a storage unit for extra business personal property, that will have to be covered under a different policy.

Homeowners Association Insurance 

A homeowners association more than likely has a blanket policy. A blanket policy for an HOA will cover all the common areas that the unit owners may use. Common areas could include a clubhouse, playground, basketball court, or event venue building available for rental.

The fees that condo unit owners pay, or the HOA unit owners if in a neighborhood, will pay for this blanket insurance since the items insured are considered common areas. If any common areas are damaged by a covered peril, the blanket insurance policy will pay for repair or replacement up to the limit. 

Health Insurance 

Blanket health insurance is not a very common occurrence but is usually in the case of an accident policy covering a group of individuals. Think of a soccer club or football players. Many recreation leagues and non-profits will purchase an accident policy for their participants. They often have rather small limits, like $30,000.

Blanket Insurance vs. Umbrella Insurance 

Blanket insurance and umbrella insurance, while sound similar, are not the same. Blanket insurance is a type of policy that provides one limit for multiple items (usually property), whether personal property, locations, etc. You can cover multiple items under blanket insurance for one limit, which provides some wiggle room for each item. 

In contrast, umbrella insurance is a limit of liability, not property, that provides protection over and above other policies that have either exceeded their coverage limit or have exclusions. For example, an umbrella insurance policy could have underlying policies like general liability insurance and auto liability insurance. If a claim for general liability is settled for more than the limit on the policy, the umbrella insurance policy will step in. 

Blanket Insurance	Umbrella Insurance
Usually a property coverage	Liability coverage
Steps in right away at claim time	Kicks in after other policy limits are exhausted
Covers multiple items	Covers only above and beyond underlying policies

Blanket Insurance vs. Scheduled Property Insurance

There is a difference between blanket insurance and scheduled property insurance, which is important to understand. The concept of blanket insurance refers to a type of policy that provides coverage for multiple items (typically property), whether it is personal property, locations, etc. There is some wiggle room for each item under blanket insurance because you can cover multiple items for one limit. 

Scheduled property insurance works opposite of an insurance blanket, where each item is insured for its own amount. If you have multiple buildings, each building will be scheduled specifically on the policy with a coverage limit. If your claim exceeds that limit, you only have that much insurance. There is no wiggle room on a scheduled property policy.

Blanket Insurance	Scheduled Property Insurance
One limit for all items	Each item has its own limit
Co-insurance will apply	Co-insurance may apply
Best when you want to insure multiple similar items	Best when you only have one or two similar items to insure
Can be more affordable	Can be more expensive

Who Should Consider Blanket Insurance? 

If you have many valuable items, blanket insurance may be most beneficial regarding coverage limits and affordability. Guns, jewelry, and antiques are examples of valuable items that could be insured on a blanket policy.

You may also want to consider blanket insurance if you own a business with many locations, even as a landlord with rental properties. Additionally, anyone who has a business at home may want to consider a blanket for the business property. This would include office supplies, furniture, and computers. 

Alternatives to Blanket Insurance

Most insurance policies are not blankets, and it may not always make sense to add or purchase a blanket. Some alternatives to blanket insurance include your more standard policies like homeowner’s, renter’s, condo, and commercial property without any blanket endorsements. This can benefit those who don’t have multiple items to insure. 

Additionally, having one expensive diamond ring would probably make more sense to schedule on your existing policy rather than purchase blanket insurance, as it can be more expensive. Talk with your agent if you are unsure if a blanket policy would benefit you.