Blanket Policy
A blanket policy provides a single coverage limit that applies across multiple buildings or locations, rather than assigning a separate limit to each individual structure.
Blanket coverage is a policy structure commonly used for apartment communities with multiple buildings or for portfolio owners with properties at multiple locations. Instead of listing each building with its own specific coverage limit, a blanket policy establishes a single aggregate limit that applies across all covered structures. This provides flexibility in how claims are paid.
The primary advantage of blanket coverage is protection against minor valuation errors on individual buildings. If one building in a community is slightly undervalued, the blanket limit can absorb the overage as long as the total blanket limit is adequate for the portfolio as a whole. This is particularly useful for large garden-style communities with many similar buildings where individual building values may vary slightly.
However, blanket coverage requires the total limit to be sufficient to cover a worst-case scenario affecting multiple buildings simultaneously. A widespread hail event, for example, could damage every building in a community at once. The blanket limit must account for this possibility. Co-insurance provisions still apply to blanket policies, with the co-insurance percentage applied to the total insured value across all covered buildings.