Blanket Coverage
A single property insurance limit covering multiple buildings, locations, or categories of property rather than scheduling each separately.
What It Is
Blanket coverage applies a single insurance limit across multiple items of property—multiple buildings at one location, buildings at multiple locations, or different categories of property (building, BPP, business income). Instead of scheduling individual limits for each building or location, the insured carries one combined limit that can be applied to any covered loss at any covered location.
The primary advantage of blanket coverage is flexibility. If a fire destroys one building worth $2M in a portfolio of 10 buildings with a $15M blanket limit, the full $2M is available regardless of whether a specific scheduled limit would have been lower. This eliminates the risk that any single building or location is underinsured relative to its specific scheduled limit.
Blanket coverage typically requires 90% or 100% coinsurance (versus the 80% usually available on specific/scheduled coverage) and requires a Statement of Values listing all properties and their values. The total blanket limit should equal or exceed the coinsurance percentage multiplied by the total value of all covered property.
Why It Matters for Brokers
Blanket coverage is essential for clients with multiple properties or locations because it eliminates the risk of underinsurance at any single location. Property values can shift between renewals as improvements are made, equipment is moved, or inventory fluctuates. Blanket coverage absorbs these fluctuations. Brokers managing real estate portfolios, multi-location retailers, or manufacturers with multiple facilities should default to recommending blanket coverage.
Real-World Example
A property investor owns 6 buildings valued at $1.2M, $950K, $2.1M, $1.8M, $875K, and $1.5M (total $8.425M). Under scheduled coverage with individual limits, Building 3 is renovated mid-year, increasing its value to $2.8M, but the schedule is not updated. A fire at Building 3 causes $2.4M in damage—the $2.1M scheduled limit is $300K short. Under blanket coverage at $8.425M (with agreed value), the full $2.4M is payable because the total blanket limit exceeds the coinsurance requirement.
Common Mistakes
- 1Setting the blanket limit at the sum of all scheduled values without accounting for the higher coinsurance requirement (90-100% vs. 80%).
- 2Not submitting an updated Statement of Values annually, causing the blanket limit to become inadequate as property values increase.
- 3Assuming blanket coverage eliminates the need to track individual property values—the SOV must still be maintained for rating and claims purposes.
How brokerageaudit.com Handles This
brokerageaudit.com's Policy Checker evaluates whether multi-location accounts would benefit from blanket versus scheduled coverage and calculates the coinsurance adequacy under both approaches. The system tracks Statement of Values submissions and alerts brokers when total values approach or exceed the blanket limit, recommending limit increases before coinsurance penalties become a risk.