Which coverage pays first in the event of a claim?

The correct answer is primary coverage because this type of insurance is designed to respond first to a loss claim. When a policyholder experiences a loss, the primary coverage will cover the expenses up to the limits outlined in the policy. This means that in cases where multiple coverages might apply, the primary coverage takes precedence and provides the initial payout for the claim.

Understanding the hierarchy of insurance coverage is crucial in navigating claims effectively, as it determines which insurer is responsible for covering losses first. This helps policyholders know which coverage to rely on when filing a claim, ensuring they receive the necessary compensation without delay. Other types of coverage, such as excess, secondary, or supplemental, serve different roles and typically come into play only after the primary coverage has been exhausted or is not applicable in certain situations. This distinction is essential for both policyholders and professionals in the field to minimize disputes and streamline claims processing.