If a policy's other insurance condition states that it will only pay after the other policy has paid its limits, the policy is considered

• A. Excess
• B. Primary
• C. Pro rata
• D. Shared

Answer: (A)

The main idea is how multiple policies coordinate payments when they both cover the same loss. If a policy will only pay after the other policy has paid its limits, that policy is considered excess. It doesn’t contribute until the first policy has exhausted its coverage, then it covers the remaining amount up to its own limit. For example, with a primary policy limit of $100,000 and an excess policy limit of $100,000, a $150,000 loss would be paid as $100,000 by the primary and $50,000 by the excess. Pro rata would divide the loss proportionally between policies, while shared isn’t the standard arrangement in this context.