Blanket Coverage Auto Insurance: Comprehensive Protection For Your Fleet

Blanket insurance is a type of insurance that covers multiple properties or locations under a single policy. It is an umbrella term for multiple coverages under one policy, including personal possessions and physical dwellings. It is relatively common and usually offers broader protection than a typical individual policy. For example, homeowners insurance is a type of blanket insurance as it covers the structure of the home and personal belongings. Blanket insurance is also available for businesses with multiple locations, such as a fast-food franchise with restaurants in different places. This type of insurance is typically more expensive than standard insurance but can provide peace of mind and simplify the insurance process.

What is blanket auto insurance?

Blanket insurance is a type of insurance that covers multiple items or properties under a single policy. It is called blanket insurance because it covers multiple items under one limit, like a blanket. Blanket insurance is not a separate category of insurance but an option that can be applied to existing personal or business insurance policies.

Blanket insurance works by grouping together each building, location, and/or personal property and insuring them under one limit. It is typically more expensive than insuring them separately, which involves listing each building with its own limits.

When determining the blanket limit, insurance companies will ask for an "insure-to-value" number or percentage. This means that to qualify for blanket coverage, the insured will need to insure their buildings or items for at least 80% or 90% of their total replacement cost. For example, if the value of your farm equipment is $500,000, the insurance company will likely want you to have blanket coverage of at least $450,000.

The insurance company will also ask for a list of everything covered under the blanket, along with their values, to determine the appropriate insure-to-value coverage limit.

Who Needs Blanket Insurance?

Blanket insurance is ideal for people or businesses with multiple properties or locations, or a lot of different tools or equipment, such as farmers. It is also a good option for individuals who want full coverage without itemizing each item.

For example, if you own a business with multiple locations, or are a landlord with multiple rental properties, blanket insurance can cover all your properties under one policy.

Types of Blanket Insurance

Blanket insurance can be applied to different types of insurance policies. Some common types of blanket insurance include:

• Blanket commercial buildings
• Blanket business personal property
• Blanket farm equipment
• Blanket jewelry
• Blanket personal property
• Homeowners insurance

Benefits of Blanket Insurance

The biggest benefit of blanket insurance is not having to worry about whether each building, location, or piece of equipment is insured at 100% of its value. Without blanket insurance, if any of your buildings or items are not insured for their full value, you will not receive the full amount they are worth.

Blanket insurance gives you more room for error in these calculations because you can afford to be off in your valuation if you have a partial loss, which is more likely than a total loss.

Cost of Blanket Insurance

Blanket insurance is typically about 10% more expensive than standard insurance coverage, where each item is listed and insured separately.

Who is it for?

Blanket insurance is ideal for individuals or businesses with multiple properties, locations, or possessions that need to be insured. It is particularly useful for those who want full coverage without itemising each item.

For example, a landlord with multiple rental properties or a business owner with multiple locations can benefit from blanket insurance. It can also be useful for those with valuable possessions, such as antiques, jewellery, or art, as it increases the limits for this type of personal property.

Blanket insurance is also suitable for those who want to insure multiple types of property at a single location. For instance, a homeowner may want to insure their house and farm equipment.

In addition, blanket insurance can be beneficial for those with complicated health insurance needs. For example, if someone has an adult parent living at home, the parent may not be considered a dependent under an individual health plan. However, blanket health coverage may allow them to be added to the policy, regardless of tax designation.

It's important to note that blanket insurance is not suitable for everyone. It may not be the best choice for those with a single-family home, apartment, or one specific business location. In these cases, individual policies or standard insurance may be more cost-effective.

What are the benefits?

While blanket insurance is usually more expensive than standard insurance, it offers broader protection and has several benefits.

Comprehensive Coverage

Blanket insurance policies offer a more comprehensive coverage plan than some other types of policies. For example, coverage may be provided for multiple pieces of farm equipment that would not be covered under a homeowners policy.

Simplicity

A blanket policy offers simplicity by covering multiple dwellings or properties under a single policy with a single coverage limit, deductible, and coinsurance. This reduces the amount of paperwork and potential confusion.

Greater Flexibility

Flexibility is another advantage of a blanket policy. Some policies allow you to add and remove property at any time or increase/decrease coverage instead of purchasing a new policy.

Reduction of Underinsurance Risk

When a dwelling or property is underinsured, you risk high out-of-pocket costs. A blanket policy can reduce or sometimes eliminate that risk by offering higher and more flexible coverages.

Cost Efficiency

While a blanket policy may be more expensive than a homeowner’s policy, it can cut costs because several properties and items can be covered under one policy instead of purchasing multiple policies.

Catastrophe Protection

In the event of a catastrophe, such as a tornado causing damage to several properties at once, having a blanket policy will allow you to have coverage on all properties and can be covered under one claim.

Peace of Mind

With blanket insurance, you don't have to worry if any one building, location, or piece of equipment or jewelry is insured at 100% of its value. Without blanket insurance, if any of your buildings or items are not insured for 100% of their value, then you won’t receive the full amount they are worth.

Less Red Tape

Blanket insurance is beneficial for homeowners as there is less red tape to wade through if a claim needs to be made.

What does it cover?

Blanket insurance is an umbrella term for multiple coverages under a single policy. It covers multiple properties in a single location or the same type of property in multiple locations. It also covers personal possessions in a dwelling.

For example, a fast-food franchise owner might purchase blanket coverage to cover multiple businesses at different locations. They wouldn't need to adjust the policy to reflect changes such as moving expensive equipment from one location to another.

Blanket insurance covers various types of liability and losses involving the insured property, such as fire, flood, earthquake, theft, and personal injury liability. It can be applied to both personal and business insurance policies.

Homeowners insurance is a type of blanket insurance that covers liability in case someone gets hurt on your property and you are sued, as well as your home's structure and personal belongings.

Blanket insurance can also be applied to health insurance, covering students at a college or individuals within an organization.

How much does it cost?

The cost of blanket insurance will depend on what you're insuring, but it is generally more expensive than standard insurance coverage, where each item is listed separately with its own limits. As a rule of thumb, blanket insurance is around 10% more expensive than insuring everything individually.

For example, if you have three buildings listed on one policy as a blanket for $500,000, that is the maximum the insurance would pay out if all three buildings were damaged or destroyed. However, if only one building is a total loss, the policy may allow you to use the entire $500,000 to replace it.

The premium for a blanket insurance policy is determined by various factors, including the amount of coverage, the age and condition of the property, the type of business, the location of the property, and the applicant's insurability. For instance, homeowners policies are generally more expensive than condo or rental policies because they do not cover the dwelling. Commercial policies tend to be pricier than homeowners policies due to the higher amount of coverage provided.

When considering the cost of blanket insurance, it's important to weigh the benefits against the disadvantages. Blanket insurance offers comprehensive coverage, simplicity, flexibility, and cost efficiency. On the other hand, it may provide insufficient coverage if the insured properties are not properly added or updated, and there may be complexity in filing claims for multiple items. Additionally, blanket insurance policies have higher premiums than standard policies due to the broader coverage provided.

To get a more accurate estimate of the cost of blanket insurance for your specific needs, it is recommended to assess your insurance requirements, research insurance providers, gather necessary information about your property and belongings, and compare quotes and coverage options from different companies.

Frequently asked questions