What is the difference between primary and excess insurance?

Primary and excess insurance are two common types of insurance policies. Primary insurance is a policy that pays out first when an insured individual or business suffers a loss. It is generally the first layer of coverage and pays out up to the policy’s limits. Excess insurance is a policy that provides additional coverage over and above the limits of the primary policy. It pays out only after the primary policy has paid out, and only up to the policy limits. For example, if an insured individual or business has a primary policy with a $100,000 limit, but the total amount of the claim exceeds this amount, the excess insurance policy would come into effect and pay up to the limit of the excess policy up to its limit. If the claim amount is still higher than the limits of both policies combined, the insured would be responsible for any remaining balance. It is important for individuals and businesses to make sure they have enough coverage for any losses they may incur. The combination of primary and excess insurance provides broader protection than just having a primary policy alone, as it will pay out for losses that exceed the limits of the primary policy.

Related FAQs

How does insurance regulation ensure financial stability?
What is the role of the Insurance Regulatory and Development Authority in regulating the insurance industry?
How are insurance companies regulated in different countries?
Is there a maximum amount of premium that can be charged by an insurance company?
How do insurance companies determine their rates?
What are the requirements for a company to be certified as an insurance provider?
What is market conduct regulation in the insurance industry?
What are the differences between traditional and online insurance policies?
What measures should be taken to reduce the number of insurance frauds?
What are the benefits of having an insurance policy?

What is the difference between primary and excess insurance?

Related FAQs

Related Blog Posts