What is the difference between primary and secondary car insurance coverage?

Primary car insurance coverage is the policy that pays first after an accident, and secondary coverage pays for any expenses that primary insurance doesn’t cover. Learning more about primary and secondary car insurance coverage can help you get all the compensation you need after an accident.

Here’s some additional information about primary and secondary car insurance coverage, how insurance for rental cars works, and how to file a car insurance claim.

Primary and Secondary Car Insurance Coverage

Which car insurance policy is primary depends on your coverage and the circumstances of an accident. For example, if your car sustains hail damage during a thunderstorm, your comprehensive insurance will usually be primary.

If a neighbor’s tree falls on your car, however, their homeowners insurance would be primary, and you could use your comprehensive insurance for any repairs the neighbor’s insurance wouldn’t cover.

If you have an accident and the other driver caused it, their liability insurance is usually primary. When the other driver doesn’t have insurance, your collision or uninsured/underinsured motorist coverage can be primary. Which one you should use depends on the state where you live and your insurance company.

Sometimes, the other driver only has the minimum insurance required in their state. After you receive payment from their insurer, you can use your underinsured motorist or collision insurance as secondary coverage for any additional expenses.

Read more: Does my car insurance cover damage caused by a lightning strike?

Primary and Secondary Insurance for Rental Cars

When you rent a vehicle, the company allows you to use its liability and collision rental car insurance. If you accept it, this type of insurance is primary. It usually costs a few extra dollars daily and supersedes your car insurance coverage.

If you decline coverage from the rental company, your policy is primary. However, if you only have liability insurance, you may have to pay for any damages to the rental car on your own after an accident.

You can buy supplemental, secondary coverage from the rental company to avoid using your car insurance as a secondary policy. This can help you prevent a rate increase after an accident in a rental car.

Some credit cards also offer secondary rental car insurance when you use them to rent a vehicle. However, the rental company’s insurance or your policy will remain primary.

Coverage from a credit card can help you improve your peace of mind and avoid paying for repairs or deductibles that primary insurance doesn’t include. Car rental insurance is included with many cards, so you won’t have to pay any additional fees.

Case Studies: Primary and Secondary Car Insurance Coverage

Case Study 1: Hail Damage to Sarah’s Car

Sarah’s car sustained hail damage during a thunderstorm. Her comprehensive insurance policy served as the primary coverage for the damages incurred.

Case Study 2: Tree Damage From Neighbor’s Property

John’s neighbor’s tree fell on his car, causing significant damage. In this case, the neighbor’s homeowners insurance acted as the primary coverage, and John could use his comprehensive insurance for any repairs not covered by the neighbor’s insurance.

Case Study 3: Accident Caused by Another Driver – Emily’s Case

Emily was involved in an accident caused by another driver. The liability insurance of the at-fault driver served as the primary coverage, providing compensation for damages. However, since the at-fault driver was uninsured, Emily’s uninsured motorist coverage became the primary coverage for additional expenses.

Case Study 4: Additional Expenses For Mark’s Accident

Mark was hit by an at-fault driver who carried only the minimum required insurance. After receiving payment from the at-fault driver’s insurer, Mark utilized his underinsured motorist coverage as secondary coverage for any remaining expenses.

Case Study 5: Rental Car Insurance For Lisa

Lisa rented a car and was offered liability and collision coverage by the rental company. If she accepted this coverage, it would become the primary insurance for the rental period. However, if Lisa declined the rental company’s insurance, her personal car insurance policy would serve as the primary coverage.

She could also purchase supplemental, secondary coverage from the rental company to avoid utilizing her own insurance as secondary coverage.

Understand Primary and Secondary Car Insurance Coverage

Understanding primary and secondary car insurance coverage is part of what you need to know after a car accident. After a crash, you should contact the insurance company that provides primary insurance first.

You can contact a secondary insurance company if it doesn’t pay for some expenses or a deductible. Making a claim with car insurance for your vehicle can raise your rates in the future. Therefore, it’s a good idea to use other insurance, like another driver’s liability coverage, if possible.

Understanding the differences between primary and secondary coverage can help you compare car insurance and decide on the best policy for your needs.