What is Broad Form Insurance?

Sometimes referred to as blanket insurance, broad form insurance is any type of insurance coverage that goes beyond the basic coverage and offers some type of benefits when some sort of extraordinary event takes place. In many cases, any rare incidents or situations covered are detailed in the terms and provisions found in the text of the insurance contract. This form of insurance can be applied to just about any type of coverage, including insurance that relates to investments and various types of physical property.

One of the most common examples of broad form insurance is found in policies that have to do with automobiles. While basic automobile coverage allows for car crashes and other accidents that can occur, the owner may want to obtain coverage for potential damage that is not covered under the basic plan. For example, if the driver frequently uses the vehicle along busy roadway systems, there is an increased possibility of damage to the windshield due to pebbles and other debris that may strike the glass. By including coverage for this type of activity within the terms of the auto insurance policy, the owner is protected in the unlikely event that flying pebbles or other debris seriously chip the windshield while the vehicle is in operation.

The structure of a contract that provides broad form insurance will usually detail the types of coverage the customer desires above and beyond the basic coverage. In most cases, specific terms and conditions apply to each type of extraordinary item the customer wishes to add. There is also normally an additional premium that must be paid in order to obtain the extra coverage. The schedule for deductibles that apply to the extra coverage may also be different than for the basic coverage. This allows the insurance provider to extend this type of broader coverage and still remain financially viable, even if claims involving these extraordinary situations are submitted from time to time.

Determining what type of broad form insurance is desired requires that the consumer look closely at his or her situation, and identify possible events that are not covered under the basic coverage of an insurance contract, but do have a remote possibility of occurring at some point in the future. If those rare events could prove costly for the consumer, and possibly lead to severe financial distress, choosing to obtain coverage for those events simply makes sense. The broad form insurance coverage allows the consumer to enjoy peace of mind, confident that even if the unlikely does take place, the event will not lead to a great deal of stress on his or her resources.