What is a "secondary insurance"?

A secondary insurance refers to an additional insurance policy that comes into play after the primary insurance has made its payments towards a claim. This means that if an individual has two insurance policies and incurs a medical expense, the primary policy will first address the claim according to its coverage limits and terms. After the primary insurer has paid, any remaining costs can then be submitted to the secondary insurance for further coverage. This arrangement can help minimize out-of-pocket expenses for the insured, ensuring that more of the medical costs are covered by insurance.

The significance of secondary insurance lies in its role in providing extra coverage, which can be particularly beneficial for individuals with high medical expenses or those requiring extensive care. It often covers costs or services that the primary insurance does not fully pay for, which can include co-payments, deductibles, or other expenses, thus adding a layer of financial protection.