What Is a Blanket Policy?
<lingo>A blanket policy refers to insurance that covers all the holder's possessions. This includes not just personal property (e.g., electronics, jewelry, etc.) stored at a location, but also multiple locations if the holder owns more than one property (e.g., a summer home, rental unit, etc.).
Blanket insurance is known for being generous when it comes to both events covered and property protected when compared to individual policy alternatives. For example, a standard policy may not cover the vintage car being stored in the garage of a vacation cottage across the country, but a blanket policy would. If both the structure and the personal propriety are damaged by a covered event, you'll receive compensation for both.</lingo>
Blanket Policy Explained
A blanket policy is more expensive when compared to its standard counterparts, and it's usually reserved for those who conduct some type of business through their properties (e.g., renting a winter location to skiers during the colder months). It can be a lifesaver for those who want guaranteed protection without having to individually list the value of each and every possession they own. If you had individual policies for each property you owned as well as separate riders for the possessions within the buildings, the paperwork would not only be more complicated, but it would also increase the chances you would forget to include an important possession (either one that you own at the time you buy the policy or one that you buy after).
<twitter>A blanket policy refers to insurance that covers all the holder's possessions. This includes not just personal property stored at a location, but also multiple locations if the holder owns more than one property. </twitter>
With a blanket policy, you have the option of establishing a far larger limit (e.g., $2 million) that applies to all properties, leaving you with one claim to file (up to $2 million). This gives the holder far greater chances of recouping an investment. If you make a miscalculation for an individual policy, you wouldn't be able to argue the amount because the smaller limits were predetermined beforehand. And if one or all of your properties have appreciated over the years, you can use the single limit to apply to the most valuable property in the case of damage.
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