In a scenario where Jim has two insurance policies (Policy X being primary and Policy Z being excess), how will they respond if Jim suffers a loss of $62,000?

In the scenario presented, where Jim has two insurance policies with one being primary and the other excess, the response to a loss is governed by the policies' coverage hierarchy. Policy X, as the primary insurance, is responsible for addressing the loss first, up to its policy limits.

Given that Jim suffered a loss of $62,000, it is essential to consider the coverage limit of Policy X. If Policy X covers only $50,000, it will pay that full amount towards the loss. This leaves Jim with a remaining loss of $12,000 ($62,000 - $50,000). Since Policy Z is an excess policy, it comes into play after the primary insurance has paid its limits. Therefore, Policy Z can cover the remaining amount of $12,000.

This layered approach between the primary and excess policies is typical in insurance arrangements, allowing for comprehensive coverage while managing costs effectively.