What does secondary coverage refer to?

Secondary coverage is a term used in insurance that refers to coverage that activates when the primary coverage has been exhausted. This concept is essential in understanding how different layers of insurance work together to provide financial protection in various situations.

For instance, if an individual is involved in an accident and their primary insurance policy pays out its limit, secondary coverage can then kick in to help cover additional costs. This can be crucial in instances where damages or liabilities exceed the limits of the primary policy, ensuring that the insured is not left with significant out-of-pocket expenses after a claim has been made.

This layered approach to insurance provides a safety net, enhancing overall coverage and allowing for more comprehensive financial protection in the event of significant claims. Understanding that secondary coverage serves as an additional layer after the primary coverage emphasizes the importance of evaluating both layers when considering insurance options.