Which of the following statements best describes primary insurance?

The statement that describes primary insurance as the main coverage before additional policies are applied is accurate because primary insurance serves as the foundational layer of coverage in an insurance program. When an event occurs that leads to a claim, primary insurance is the first to respond and provide compensation up to its limit. After the limits of the primary policy are exhausted, any additional layers of coverage—such as excess or umbrella policies—would then come into play.

This concept is crucial for policyholders to understand, as it helps in managing overall risk and ensures that claims are handled efficiently. Primary insurance is typically the first line of defense against losses and is essential for individuals and businesses seeking to protect their assets or manage liability exposure.