In valued policy states (specifically Texas and Arkansas), when insured buildings are covered under a blanket limit and one is destroyed by fire, does the insurer owe the full stated value of the destroyed building up front per the valued policy provision, or does the blanket limit exclude the valued policy provision unless the entire list of blanketed buildings is destroyed?

Indiana Subscriber

This excerpt from an FC&S article titled Valued Policy Laws provides some guidance:

The valued policy laws of four states—Florida, Georgia, Louisiana, and New Hampshire—specifically exempt blanket insurance from the application of the law. In these states, total loss under a blanket policy—even if the entire property subject to the blanket insurance is destroyed—does not invoke the valued policy provision; only the actual amount of the loss is payable.

In other states with valued policy laws it would seem that for the law to apply the coverage must be only on buildings and all buildings insured under the blanket item of coverage must be totally destroyed. But this question does not appear to have been resolved one way or another in the courts.

As you can see, other than in the states mentioned—which do not include Texas or Arkansas—it would appear that all buildings under the blanket limit must be totally destroyed, but courts have not weighed in on this subject.

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