What does it mean when a policy is fully paid up?
In auto insurance, fully paid up means your policy is up-to-date, and you don't owe any premium payments. When you fully pay up your auto insurance, you process your entire annual payment at once in return for insurance coverage throughout the year. As a result, you will avoid any late fees tacked on to missing payments, and you can earn between 6% and 12% off your auto insurance rates with a paid-in-full discount.
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Brandon Frady
Licensed Insurance Agent
Brandon Frady has been a licensed insurance agent and insurance office manager since 2018. He has experience in ventures from retail to finance, working positions from cashier to management, but it wasn’t until Brandon started working in the insurance industry that he truly felt at home in his career. In his day-to-day interactions, he aims to live out his business philosophy in how he treats hi...
Licensed Insurance Agent
UPDATED: Oct 17, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Oct 17, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- “Fully paid up” means that your auto insurance coverage is up-to-date and you don’t owe any premium payments
- Fully paid up auto insurance qualifies for a 6%-12% discount with some of the leading insurance companies in the country
- If your auto insurance is fully paid up, you won’t have to worry about a lapse in coverage as long as you remember to renew your policy at the end of the year
When your auto insurance policy is fully paid up, your coverage is up-to-date. As a result, you won’t have to pay any more premiums until your next renewal date.
Most insurance companies allow drivers to pay their premiums monthly, biannually, or annually. If you choose the paid up option, that means you will pay your annual auto insurance premiums up-front on your policy’s start date. This way, you won’t have to remember monthly payment dates. You may even receive a discount as well for paying your policy in full.
Understanding auto insurance policies will give you a better idea of what it means when your policy is “fully paid up.” Read our guide to learn more about insurance premiums and policy types to determine if it’s advisable for you to pay all of your premiums up-front.
If you’re uncertain as to whether or not your insurance company offers a fully paid up discount, enter your ZIP code above to search for more affordable auto insurance companies in your area.
Table of Contents
What does “fully paid up” mean?
“Fully paid up” car insurance implies that, rather than paying a monthly insurance premium, you decide to pay your total annual rate all at once.
Can you pay for auto insurance up-front for the whole year? Depending on your insurer, you can fully pay up your policy online, over the phone, or by mail with a check or money order.
What happens when you pay your auto insurance in full? First, you can drive confidently, knowing that your insurance policy covers you. You’ll never be charged late fees because you won’t forget a monthly payment. You also won’t have to worry about a lapse in coverage, as long as you remember to renew your policy at the end of the year.
Is it smart to pay auto insurance in full?
Is auto insurance paid in advance? Yes, you pay up-front for coverage in case you get into a future accident or collision. Insurance companies like it when drivers have fully paid up policies because they receive a large lump sum of cash up-front that you may never use if you do not ever file a claim.
Companies will often reward drivers with cheaper rates for paying in full. However, your budget and personal preferences will determine whether or not it’s beneficial to pay your car insurance in full.
For example, if your auto insurance company only offers a tiny discount (i.e., 5% or less), it may not be worth it. You may prefer to pay the smaller monthly premium if it’s only going to cost you a few more dollars overall.
Examine the table below to view average annual rates from the top auto insurance companies in the country. This can help you decide if your budget might benefit from a paid up insurance policy:
Average Annual Auto Insurance Rates by Company
Company Average Annual Auto Insurance Rates
Allstate $4,533
American Family $3,699
Farmers $3,910
Geico $3,074
Liberty Mutual $5,296
Nationwide $3,187
Progressive $3,935
State Farm $2,731
Travelers $3,729
USAA $2,489
Remember, these rates are merely averages. Your rates will vary based on your driving record and location. Before you purchase auto insurance, shop around with at least three different companies to find the most affordable option for drivers with fully paid up insurance.
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Are there auto insurance discounts for fully paid up policies?
The good news is yes. Most companies offer auto insurance discounts for fully paid up policies.
On average, fully paid up auto insurance rates are discounted by 6%-12%, depending on where you have coverage.
Review the table below to determine which of the top auto insurance companies offers a fully paid up discount. The discount amount is listed if known.
Paid-In-Full Auto Insurance Discounts By Company
Company Paid-In-Full Discount Percantage Saved
Allstate ✓ 10%
American Family ✓
Farmers ✓ 6%
Geico
Liberty Mutual ✓ 12%
Nationwide
Progressive ✓ 11%
State Farm
Travelers ✓ 9%
USAA
Most insurance companies offer a discount. Some companies, including Liberty Mutual, still give a paid in full discount to drivers who pay their entire policy in two payments as well as just one. However, even if you don’t see a discount listed, don’t hesitate to inquire about paid in full discounts before you buy.
For example, Geico may not offer a fully paid up discount, but the company does charge an installment fee for monthly payments. Read our Geico auto insurance review to learn more.
You may also find that smaller local companies offer this discount and better rates than these top companies. Don’t miss out on more affordable auto insurance by selecting the most popular insurer.
Enter your ZIP code below to begin comparing auto insurance quotes from companies near you today. It’s the easiest way to guarantee that you aren’t overpaying for fully paid up auto insurance.
Frequently Asked Questions
What does it mean when a policy is fully paid up?
A policy being “fully paid up” refers to a type of life insurance policy where the policyholder has paid all the required premiums, and as a result, the policy remains in force for the rest of its duration without the need for any further premium payments.
How does a policy become fully paid up?
To achieve a fully paid-up status, the policyholder must make all the required premium payments outlined in the insurance policy. This typically involves paying premiums on a regular basis, such as monthly, quarterly, or annually, over a specific period or until a specific age.
Can any type of insurance policy be fully paid up?
The concept of a fully paid-up policy is more commonly associated with permanent life insurance, such as whole life or universal life insurance. These types of policies are designed to provide coverage for the entire lifetime of the insured, and once all the premiums are paid, the policy becomes fully paid up. Term life insurance policies, on the other hand, do not typically offer a fully paid-up option as they are designed to provide coverage for a specified term only.
What are the benefits of a fully paid-up policy?
One significant benefit of a fully paid-up policy is that it provides lifelong coverage without any further premium payments. This can be particularly advantageous for individuals who want to ensure their beneficiaries receive a death benefit regardless of when they pass away. Additionally, fully paid-up policies often accumulate cash value over time, which can be accessed by the policyholder for various purposes, such as borrowing against the policy or surrendering it for a cash payout.
Are there any considerations or conditions for a policy to become fully paid up?
Each insurance policy has specific terms and conditions that must be met for it to become fully paid up. These conditions usually include making all the required premium payments on time and for the prescribed duration. It’s essential to review your policy contract or consult with your insurance provider to understand the specific requirements for achieving a fully paid-up status.
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Brandon Frady
Licensed Insurance Agent
Brandon Frady has been a licensed insurance agent and insurance office manager since 2018. He has experience in ventures from retail to finance, working positions from cashier to management, but it wasn’t until Brandon started working in the insurance industry that he truly felt at home in his career. In his day-to-day interactions, he aims to live out his business philosophy in how he treats hi...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.