When multiple policies insure a person, what does the "primary" policy do?

The concept of a "primary" policy refers to the order in which insurance policies respond to a claim. When multiple policies are in place for a single person or entity, the primary policy is the one that is first in line to provide coverage for a loss. This means that when a covered event occurs, the primary policy will be the first to pay for the claim up to its limits, before any excess or secondary policies come into play.

This distinction is important because it helps determine how claims are settled when multiple insurers are involved. If a loss occurs, the insured will first turn to the primary policy to cover the damages. Only after the limits of that policy are exhausted or if the claim is not covered will the insured seek compensation from other policies that might offer additional coverage.

The other options describe scenarios that do not align with the function of a primary policy. For instance, a policy that pays only after all others can be considered an excess policy, while limitations to specific events pertain more to the terms of a particular policy rather than its role in a chain of coverage.