What type of policy pays out only after another policy has made a payment?

An excess policy is specifically designed to provide coverage after a primary policy has paid up to its limit. Essentially, it "kicks in" after the limits of the primary insurance are exhausted. This means that if a claim occurs and the costs exceed the initial policy's coverage limit, the excess policy will cover the remaining amount. This feature makes it an essential tool for individuals or businesses that want to ensure they have additional financial protection beyond their primary insurance.

In contrast, a surplus policy relates to insurance that provides coverage for risks that exceed standard market capacity but does not necessarily work on the premise of paying only after others have made payments. A primary policy is the one that first responds to a claim, covering it as long as it is within its limits. A comprehensive policy typically provides broad cover for a range of risks without coordinating payments with other policies. Thus, the excess policy is the appropriate term for the scenario described, as it is reliant on another policy's payment before offering its additional coverage.