Which are the two types of excess insurance?

• A. Primary and Secondary
• B. Layered and Umbrella
• C. Vertical and Horizontal
• D. Specific and Aggregate

Answer: (D)

The key idea is how excess coverage attaches to losses: per-claim protection versus aggregate protection.

Specific excess coverage attaches to each individual loss after the underlying policy has paid up to its limit. For every claim, the excess policy steps in to cover the amount above the underlying limit, up to its own per-claim limit. This is helpful when you expect that large single claims can occur and you want protection on a claim-by-claim basis.

Aggregate excess coverage starts paying only after the insured’s losses reach an overall, policy-period total (the aggregate limit) on the underlying coverage. Once that aggregate is exhausted, the excess policy covers additional losses up to its aggregate limit for the rest of the period. This matters when total losses in a period are the concern rather than or in addition to the size of any single claim.

So, the two types reflect per-claim (specific) versus per-period (aggregate) attachment, which is why specific and aggregate is the best answer. Other options describe structure or roles (primary/secondary, umbrella, layered) but don’t define the two standard excess-coverage forms.