What is Primary Coverage?
Primary coverage is a type of insurance that provides the first line of defense in the event of a claim. It is the insurance that responds initially to any covered loss or liability without needing to wait for other insurance policies, such as excess or secondary coverage, to be activated. Primary coverage is essential in various personal and business insurance policies, including auto, homeowners, and property insurance.
In personal insurance, primary coverage is what typically pays for damages or liabilities directly related to the policyholder. For instance, in an auto insurance policy, primary coverage would handle accident-related claims before any additional layers of insurance would apply.
In the business context, primary coverage is crucial for protecting assets and liabilities. For example, in commercial property insurance, the primary coverage would pay for damage to the insured building or equipment due to events like fire or theft before excess policies are considered.
Overall, primary coverage ensures that claims are handled quickly and effectively, providing immediate financial support in case of a loss or damage.