Primary Insurance

What Is Primary Insurance?

Primary insurance refers to the first policy that pays out when a loss occurs and multiple insurance policies could apply. It takes precedence over other policies, meaning the primary insurer is responsible for covering claims up to the policy limit before any secondary or supplemental policies contribute.

In landlord insurance, for example, your primary policy would typically cover damage to the structure, liability claims, or loss of rental income due to covered events like fire or storm damage. If you have umbrella insurance or another form of secondary coverage, those policies would only kick in once the primary coverage limit has been exhausted.

How Does Primary and Secondary Insurance Work?

Understanding the distinction between primary and secondary insurance rules is important when coordinating coverage. This setup is common in both personal and commercial insurance. For example:

• If a rental property owner has a standard landlord insurance policy and an umbrella policy, the landlord insurance is the primary coverage.
• The umbrella insurance is the secondary insurance—it only pays after the landlord policy has reached its coverage limits.
  

This same logic applies in health insurance too: If you’re covered under two health plans, one plan must be designated as the primary insurer and the other as secondary. Primary and secondary insurance rules determine which pays first, typically based on coordination of benefits rules or contract terms.

Why Primary Insurance Matters

Designating the correct primary insurance is critical for avoiding denied claims, delayed payouts, or coverage disputes. Landlords should ensure their primary policy covers major property risks and has appropriate limits. If you’re unsure how your coverage layers interact, it’s worth reviewing your policies—or talking to your agent—to confirm which one takes the lead.