Primacy

What Does Primacy Mean?

Primacy is the assignment of the right insurer to a claim when an insured has two or more policies covering the same risk.

Insuranceopedia Explains Primacy

Primacy is a mechanism that prevents policyholders from profiting from their insurance coverage. Insurance is meant to cover a loss, not gain a profit from it. For example, if a person with two auto insurance policies had their car totaled in an accident and both policies paid for the claim in full, then one policy would be covering their loss while the payout from the other policy would essentially be profit.

While the primary policy will be the one that pays the claim, the secondary policies might still compensate the insured after they have exhausted their primary coverage.