What defines an insurance policy that pays primary before any other coverage does?

A policy that pays primary before any other coverage is referred to as primary coverage. This type of insurance is responsible for covering the insured's losses or liabilities up to the limits specified in the policy. It will pay out first before any other additional policies or coverages are triggered, allowing the insured to receive benefits without delay from other potential sources of insurance.

When a policy is categorized as primary coverage, it takes precedence over other policies that might provide backup or supplementary coverage. This is crucial for situations where multiple policies could apply, as it clarifies the order of payments and helps avoid disputes between different insurance providers about who is responsible for a claim.

Understanding the role of primary coverage is key when evaluating how different insurance policies interact with each other in the event of a loss. Other types of coverage, such as excess coverage, come into play after primary coverage has been exhausted, serving a distinct purpose in protecting against higher losses.