Blanket Mortgage Hazard Insurance

This policy protects the lender’s mortgage portfolio for property damage on a blanket basis without tracking and force-placing uninsured properties. It is a substitute for Lender-Placed Mortgage Hazard Insurance. The lender's entire portfolio is covered with all risk physical damage and per-occurrence limits to the outstanding loan balance. The disadvantage of the blanket mortgage hazard policy is that the premium cannot be passed to the borrower, which results in non-interest expense to the lender.

The premium is based on the size of the portfolio being insured. This insurance technique will be appropriate when a lender has a low-risk portfolio or a portfolio that is in run-off.