Two buildings valued at $500,000 and $700,000 are insured under a single blanket limit of $1,200,000 with a $10,000 deductible. Fire causes a $600,000 loss to the smaller building. What is paid?
Explanation
A blanket limit is one limit available to any covered item at any covered location, so the whole $1,200,000 stands behind a loss at either building and the $600,000 loss is paid in full, less the $10,000 deductible, for $590,000. Specific limits work the other way: a $500,000 limit written on that building alone would cap the recovery there and leave $100,000 uninsured. Blanket coverage does not waive the deductible.
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