StateCover Guide
Glossary

Primary and secondary coverage

By Editorial team, last reviewed

Quick answer

When two or more policies cover the same loss, the primary policy pays first, up to its limits. The secondary, or excess, policy pays only what is left after the primary coverage is used up, up to its own limits.

How it works

The NAIC defines primary insurance as the coverage that takes precedence when more than one policy covers the same loss. Two everyday situations:

  • Borrowed cars. If you cause a crash while driving a friend's car, the Texas Department of Insurance explains that the car owner's insurance pays the claim. If the owner has no insurance, or not enough, your own insurance pays the rest.
  • Umbrella policies. The NAIC describes personal umbrella and excess coverage as liability protection above the amount set in a basic policy, so it pays only after your auto liability limits are exhausted.

Example: you borrow a car whose policy has a $50,000 property damage limit and cause $65,000 of damage. The owner's policy pays the first $50,000. Your own policy may then pay the remaining $15,000, up to your property damage limit.

Which policy is primary is set by the wording of each policy and by state law. If more than one policy could apply to a crash, ask your insurer which coverage pays first and how its limits stack up against the other policy.

Sources

Last reviewed by the StateCover Guide editorial team. See our editorial policy. Spotted an error? Tell us.