What type of insurance provides coverage only after primary limits are exhausted?

Excess insurance is designed to provide additional coverage when the limits of a primary insurance policy have been fully used. This type of insurance comes into play once the primary coverage has been exhausted, thus offering a safety net that protects policyholders from larger losses. It is particularly useful in high-risk scenarios where the potential for significant claims exists, ensuring that individuals or businesses are not left underinsured.

Basic insurance, catastrophic insurance, and comprehensive insurance serve different purposes. Basic insurance typically covers only the essential risks, catastrophic insurance is geared toward protecting against severe, often unexpected losses, while comprehensive insurance provides broad coverage protecting against a wide variety of risks but does not function as a secondary layer of protection after another policy. By understanding the specific function of excess insurance, one can see its crucial role in managing larger financial risks.