What’s the Difference Between Primary and Secondary Auto Insurance?

Primary insurance is the first policy to pay when a claim is filed, providing coverage for most insured incidents. For most vehicle owners, their personal auto policy is the primary coverage.

• Pays first for damages or losses.
• Usually required by law if you own a car.
• Covers bodily injury liability, property damage liability, and collision/comprehensive (if added to your policy) claims, up to certain limits and with chosen deductibles.

Example Scenario

If Mark has an accident in his own car, his personal car insurance company (primary) covers the damages up to the policy limits. He does not have to file claims with any other insurers unless costs exceed those limits.

Secondary insurance acts as a backup. It only provides coverage after your primary policy pays or if certain conditions are met, such as policy limits being reached. Secondary insurance often applies with credit card rental benefits or as supplemental liability coverage.

• Kicks in only when primary coverage is exhausted or not applicable.
• Can help cover deductibles, gaps, or excluded damages from the primary policy.
• Common with rental car insurance or when health insurance coordinates benefits after a car accident.

Example Scenario

Jane rents a car and pays with a credit card offering secondary rental insurance. If she has a collision, she must first file a claim with her personal auto insurance. The card’s policy will then cover any costs not paid by her primary insurer, such as the deductible.

Primary vs. Secondary Insurance: Coverage Details

Rental Car Coverage

• Primary: Personal auto policies or select credit cards (e.g., Amex cards with American Express Premium Car Rental Protection) pay first for covered rental car damages.
• Secondary: Most credit cards’ coverage is secondary and only pays after your personal auto insurance.

Medical/PIP Coverage

• Primary: Medical Payments (MedPay) and Personal Injury Protection (PIP) from auto insurance usually pays before health insurance. They also cover some expenses not included in health insurance, like ambulance rides and funeral expenses.
• Secondary: Health insurance may act as secondary, covering costs after auto MedPay/PIP is used up.

Multi-Policy Situations

If multiple policies cover an incident, the one labeled “primary” by contract or state law pays first. If expenses exceed its limits, the “secondary” kicks in to cover the remainder (up to its own limits).

• Read your policy: The declarations page will specify whether the insurance is primary or secondary.
• Check credit card benefits: Most card issuers clarify coverage in the benefits guide provided with the card.
• Ask your insurer: When in doubt, contact customer service for clarification.

Primary and secondary auto insurance protect you financially in different ways. Primary coverage assumes the first financial responsibility after an incident, fulfilling legal requirements and typically offering broad benefits. Secondary insurance is designed to supplement, not replace, your primary policy—stepping in only when primary coverage is insufficient or unavailable.

Beforehand, make sure you understand the order of coverage, read all policy documents, and proactively clarify any confusion with insurers and credit card issuers before an incident occurs. Taking these steps can help minimize hassles, expenses, and surprises during the claims process.