Primary vs Secondary Coverage

At the most basic of levels, these commonly misunderstood terms refer to only one thing -- who pays first for your loss.

If your travel insurance plan's coverage is "secondary" you will have to file a claim first with any other source of reimbursement you might have. If the travel insurance is "primary" you file with them first. Here's a common example:

Let's say a traveler has regular medical insurance that covers him anywhere in the world but outside the US he has to pay a 20% co-pay.

While in India he has some sort of medical problem and ends up having to pay the local doctor $500 (the doctor won't bill his insurer directly).

If he has purchased a travel insurance plan (let's say with a $50,000 limit) with "primary" medical coverage, when he gets home he files a claim directly with them and is done with it. Assuming the plan has no medical deductible or co-pay (some travel insurance plans do) he's reimbursed for the full $500.

If he has purchased a plan with "secondary" coverage he would first send the bill to his regular health insurance provider which would issue him a check for $400 ($500 less his 20% co-pay). He would then turn around and file a claim with his travel insurance company for the $100 his health insurer didn't cover. The travel insurer (again assuming there's no deductible or co-pay) sends him a check for the $100 and he's been reimbursed in full.

You can see the end result is the same. But having "secondary" coverage, in this case is definitely more work (How much more work? See our Claims topic for examples of how involved filing a claim is)

But what if this traveler's regular medical insurance didn't cover him in India as would be the case if he were on Medicare and many other plans? His "secondary" coverage would become "primary" as it is now first in line for payment.

What "Primary" insurance is not.

The most common misconceptions about "primary" medical coverage are:

1) With a "primary" plan you can just present your insurance papers to the doctor or hospital just like you do with your Blue Cross card at home and the service provider will directly bill the insurer and you're off the hook for filing the claim forms. 99% of the time that's not going to happen. (one exception is here). "Primary" or "secondary", almost all travel insurance plans purchased for vacation trips work the same way -- pay your medical bill and submit the paperwork for reimbursement when you get home.

2) A travel insurance plan with "primary" medical coverage is always your best choice. Let's look at that same traveler to India but instead of a $500 loss he had a huge medical problem with a cost of $80,000 and see how the plans compare:

With his "primary" coverage the travel insurer pays up to its coverage limit ($50,000) and the traveler files a claim with his regular insurer for the balance -- $30,000. They send him a check for $24,000 (the $30,000 less the 20% co-pay). When it's all settled he's out of pocket $8,000.

But let's suppose he used a "secondary" insurer. He sends his $80,000 bill to his regular insurer who sends him a check for $64,000 ($80,000 less the 20% co-pay). He submits a claim to his travel insurer for the $16,000 and they cover that full amount. When it's all settled he's out of pocket $0.

3) If you don't have enough cash on hand or a credit card that can pay the hospital bill a "primary" insurer will arrange direct payment to the hospital whereas a "secondary" insurer won't. It's true that some insurers will do this and some won't but whether they will or won't has nothing to do with the insurer offering "primary" or "secondary" medical coverage.

Here's from a TravelSafe plan with "secondary" medical coverage:

Advance payment will be made to a Hospital, up to the Maximum Benefit Amount [$100,000], if needed, to secure Your admission to a Hospital, because of a covered Sickness or Injury. The Program Medical Advisor will coordinate advance payment to the Hospital.


And here's from a Travelex plan with "primary" medical coverage:

The Company will advance payment to a Hospital, up to the maximum shown on the Confirmation of Coverage [$50,000], if needed to secure Your admission to a Hospital because of an Accidental Injury or Sickness.  

Which would you rather have in an emergency and the hospital is demanding money upfront that you don't have?

How do you know if a plan you're considering has "primary" or "secondary" coverage?

If you're using one of the popular online comparison sites it should be spelled out pretty clearly. But you can always figure it our from the plan wording. Note that the terms "primary" and "secondary" may not be in the wording. It's most common to find references to "excess coverage" or similar. Here's from one plan:


Excess Insurance:
The insurance provided by this Policy shall be in excess of all other valid and collectible insurance or indemnity. If at the time of the occurrence of any loss there is other valid and collectible insurance or indemnity in place, the Company shall be liable only for the excess of the amount of loss, over the amount of such other insurance or indemnity, and applicable deductible. Recovery of losses from other parties does not result in a refund of premium paid.


That spells it out pretty well -- this "secondary" insurer will only pay any amount you can't collect from any other source of reimbursement. But don't stop reading there. As always, you have to check for any state exceptions that might apply in your case. For example, if you're a resident of Georgia you're probably going to find this:

GEORGIA : Under the General Provisions section, the "Excess Insurance" Provision is deleted in its entirety.

So purchasers of this policy who reside in Georgia will be getting "primary" medical coverage when most others won't. Be sure to check as it could make a difference in how you proceed if there is a claim against the policy.

It's also very common for different coverages in the same plan to have different "primary" or "secondary" status. A plan could have "secondary" medical coverage but "primary" rental car coverage and so forth.

travel insurance basics