What best describes excess coverage?

Excess coverage refers to a type of insurance that provides additional limits of coverage beyond what is provided by a primary policy. It serves to cover any unpaid balances after a primary policy’s limits have been exhausted. In this context, if the primary insurance policy does not fully cover a claim or if certain expenses exceed the limit of the primary policy, excess coverage can kick in to cover these additional costs, ensuring that the policyholder is financially protected against significant losses.

The other options do not accurately depict excess coverage. Some policies that pay first in case of a loss contribute more to the idea of primary coverage, whereas supplementary policies can have different functions not limited to just covering unpaid balances. The scenario-specific nature of certain policies doesn't align with the general principle of excess coverage, which is to provide additional financial protection. Lower premiums are often associated with primary policies, especially when compared to excess or umbrella policies, and therefore do not reflect the essence of what excess coverage entails.