South Carolina Personal Lines Practice Exam

What type of policy insures all property at multiple locations for a single amount?

1. Single limit policy

2. Blanket policy

3. Scheduled policy

4. Comprehensive policy

The correct answer is: Blanket policy

The blanket policy is designed to insure multiple locations under a single limit of coverage. This type of insurance is particularly beneficial for businesses or individuals that have several pieces of property or different locations requiring coverage. Instead of specifying a distinct amount of coverage for each location or item as seen in a scheduled policy, a blanket policy provides a unified total amount that can be applied to various properties without needing individual limits for each. The flexibility of a blanket policy allows the insured to claim for any loss across multiple properties, up to the full limit, making it efficient in terms of administration and often cost-effective. It provides protection against losses in a more streamlined manner, catering to risks that can affect any of the locations included under the blanket limit. In contrast, a scheduled policy specifically lists individual properties with assigned limits for each, which can lead to complications if losses occur in multiple locations as each would be handled separately. A single limit policy typically refers to a straightforward coverage limit for one specific item or area rather than multiple ones. Comprehensive policies serve broader purposes and often include a variety of coverages, but they do not specifically address insuring multiple locations under one sum in the way a blanket policy does.