For any individual, business, or real estate agency that manages multiple properties, blanket mortgage insurance is a must. It can also cover rental properties.
There are several types of blanket insurance:
- It might cover different types of properties at one location
- It might cover two different properties at two locations
- It might cover both - insured's dwelling and personal property
The terms and coverage of this type of insurance is determined on a case by case basis.
Why Blanket Mortgage Policy?
Most real estate agencies have multiple properties that are financed at different times and on different mortgage rates. When there are low mortgage rates, it is possible to group the properties and refinance them under one cover, i.e. blanket insurance. So, this type of cover is advised when you want to consolidate properties for refinancing.
There are times when you want to invest more in real estate or develop a commercial property. In such a case, you may require a huge amount of cash. By furnishing other properties under blanket mortgage, you can collect the required fund.
Including other real estate assets in blanket mortgage gives lender a better protection as the extra value act as security. This will help in getting better loan terms and interest rates also.
Advantages of Blanket Mortgage Insurance
- Lesser borrower follow-ups
- Hassle free insurance tracking
- Both residential and commercial properties can be covered
- Losses usually get adjusted on the basis of replacement cost
Blanket insurance can cover both - commercial and residential properties. While vacant or occupied commercial buildings, apartment buildings, and office buildings fall under the commercial properties category, tenant occupied homes, one-to-four family homes, mobile homes, and vacant homes come under the residential category.
Like any other insurance, blanket mortgage cover also has exclusions and limitations. Each coverage type has its own limits. In case properties at multiple locations are insured, there could be different loss limit for each location.
It is seen that the premium rates for blanket insurance is usually 5-10 percent more than the standard insurance policy. Purchasing a blanket cover instead of two separate policies will still be cheaper. It is always better to compare the cost of purchasing two several covers and a blanket insurance to get a better deal.
If a property owner has different properties with each having a different value, blanket cover will remove the possibilities of a coverage gap. As a result, if there's a drop in the price of a property, it will not impact the value and insured amount. For any insured property, insurer will get full amount of coverage.
When you are out there looking for blanket mortgage insurance, make sure to interact with at least 3-4 insurance companies to get the best price and cover. If possible, ask for references and check out the feedback of the company.