Property and Casualty Insurance Practice Exam

What is a key characteristic of blanket insurance?

1. It only covers one item

2. It covers multiple items at a single location or multiple locations

3. It requires higher premiums

4. It has no maximum limit

The correct answer is: It covers multiple items at a single location or multiple locations

A key characteristic of blanket insurance is that it covers multiple items at a single location or multiple locations. This type of insurance provides a more flexible approach to coverage, as it allows policyholders to insure various types of property or items under a single policy, rather than insuring each item individually. This is particularly beneficial for businesses or individuals with numerous assets, as it simplifies the management of insurance coverage. By combining coverage for different locations or types of property, blanket insurance helps to streamline policy administration and can often provide more cost-effective protection. Understanding blanket insurance as a broader coverage option is essential, especially in scenarios where the insured may have fluctuating values or numerous assets. This characteristic differentiates it from other insurance forms that might limit coverage to specific items or a set location.