Summary: There are two basic methods of insuring property. One is specific insurance (sometimes referred to as “scheduled” insurance), in which a definite amount of coverage applies to any one item of property. For example, a policy may have a total amount of insurance of $140,000, with $100,000 applying to a building, and $40,000 to its contents. If a loss occurs to the building and contents, the limits shown on the policy are applied separately, plus an additional 25 percent (of the amount paid) for debris removal.

The other method is blanket coverage, in which different items are insured under one total amount. It may be “vertical” coverage, which applies to two or more items of property, such as a building and personal property, in a single fire division. It may be “horizontal,” which applies to a single kind of property in two or more buildings in one or more locations. An example is merchandise in three separate warehouses. On the other hand, blanket insurance may be a combination of the two, covering two or more buildings and their contents. A blanket limit of $140,000 for building and contents has the entire amount of insurance available to apply to building, contents, or both in event of a covered loss. For claims adjustment purposes there is no distinction between contents and building.