Excess insurance

Excess insurance

Excess insurance is a type of liability insurance that provides coverage for losses exceeding the limits of an underlying primary insurance policy. Unlike primary insurance, which responds first to a claim up to its specified limit, excess insurance activates only after the primary coverage is exhausted, offering additional financial protection against significant or catastrophic losses. For example, if a primary auto insurance policy has a liability limit of $100,000 and a claim amounts to $150,000, an excess policy with a $50,000 limit would cover the remaining $50,000 after the primary policy pays out.