What is Primary Insurance?

Primary Insurance refers to the main insurance policy that covers an individual or property. It is the first policy to pay in the event of a loss or claim. The primary insurance policy provides the initial layer of coverage for losses up to the policy’s limit.

For example, if an individual has a health insurance policy with Insurance company A and another with Insurance company B, the policy with Company A may be designated as the primary insurance. In the event of a medical claim, Company A would first pay up to the policy’s limits. If the costs exceed the policy limit, the secondary insurance (Company B) may cover the remaining costs.

Primary coverage is important because it determines the payment order in the event of a claim. It is also typically the insurance policy with the most comprehensive coverage. The terms and conditions of the primary coverage often dictate what is covered, the deductibles, the policy limits, and other important factors.

In auto insurance, the primary insurance would be the auto policy covering the vehicle involved in an accident. In a homeowner’s insurance scenario, the primary coverage would be the homeowner’s policy covering the residence.

It’s crucial to note that primary insurance does not mean it’s the only insurance needed. Depending on the situation, secondary or tertiary insurance may be necessary to cover potential losses fully.