What does it mean when a policy is ‘fully paid up?’

If you buy fully paid-up auto insurance, you will have to pay for your entire policy period upfront. This can save you money in the long run as most insurance companies offer discounts. Drivers looking for fully paid-up auto insurance quotes should always provide accurate information and apply every discount they qualify for.

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Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. ...

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Reviewed by Rachael Brennan
Licensed Insurance Agent Rachael Brennan

UPDATED: Feb 10, 2022

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Can't-Miss Facts

  •  When your policy is paid-in-full, you have made one payment that covers your entire policy period
  • Most insurance companies reward drivers with a paid-in-full discount
  • Drivers can shop online to find the best policy for their insurance needs

If you’re trying to pay less for your automobile insurance policy, you may not think to buy fully paid-up auto insurance; however, doing so could actually save you money.

It’s true that when you choose an insurance company’s paid-up option, you will have to pay one large lump sum that will cover your entire policy period, but since this eliminates any risk that you’ll forget to make a payment during your policy period, most insurance companies will offer you a discount.

If you can’t wait to start shopping for fully paid-up insurance quotes, enter your ZIP code to get free auto insurance quotes.

What is paid-up auto insurance?

While shopping online for a new policy you may see that you have the choice to pick a ‘paid-up insurance option,’ but what is that exactly?

Well, when an auto insurance company offers fully paid-up auto insurance you can choose to pay for your policy with one large payment up-front rather than making a smaller payment once a month for your coverage. Now, if you’re on a tight budget you may think that affordable fully paid-up auto insurance is unattainable, but that is not always the case.

When you get free fully paid-up auto insurance quotes online, you’ll see that most insurance companies are more than happy to offer discounts to drivers who choose to pay for their policy all at once.

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Why should drivers buy a paid-up insurance policy?

Choosing to make one lump sum payment for your insurance in order to save money on your policy may seem counterintuitive to many drivers. However, not only will you eliminate the chance of missing a payment and therefore risking the cancellation of your policy, but you could receive other benefits as well.

Unfortunately, paid-up additions aren’t included in those benefits, but what are paid-up additions, and what do they have to do with insurance?

‘Paid-up additions’ is a term that you will hear if you are considering buying life insurance as you can use them to purchase more insurance if you buy a whole life policy; however, while you won’t be able to use them for your car insurance coverage, you could get a refund if you decide to cancel your auto insurance policy in the middle of your policy period.

How much are auto insurance rates?

Even if two drivers decide to acquire auto insurance from the same company, the fully paid-up auto insurance rates won’t be exactly the same for either of them. That’s due to the fact that insurance companies send every driver through a detailed underwriting process that gives an applicant a unique rating.

This rating lets the insurance company know how big of a risk you pose to the company. Now, to determine your rate, you’ll need to share your full name, gender, age, and marital status among other details whenever you fill out a free quote online.

Bear in mind that every insurance company has its own approach to underwriting which means that they approach risk differently. If you want to get an idea of what you might pay for insurance with some of the biggest names in the insurance market today, take a look at this chart here:

Insurance ProviderSingle 17-year-old femaleSingle 17-year-old maleSingle 25-year-old femaleSingle 25-year-old maleMarried 35-year-old femaleMarried 35-year-old maleMarried 60-year-old femaleMarried 60-year-old male
Allstate$9,702.39$11,687.90$4,498.53$4,674.05$3,644.62$3,668.74$3,595.93$3,595.93
American Family$8,606.74$11,338.72$4,508.70$5,172.72$3,076.88$3,440.54$2,918.23$3,357.40
GEICO$5,977.56$6,157.76$2,937.45$2,902.58$2,717.10$2,944.34$2,638.90$3,023.87
Nationwide$6,664.22$8,542.40$2,762.74$2,985.74$2,350.64$2,387.13$2,080.17$2,198.96
Progressive$10,399.12$11,605.52$2,927.41$2,965.04$2,473.67$2,345.40$2,202.78$2,243.60
State Farm$5,378.84$6,859.94$2,421.28$2,488.98$2,223.31$2,223.31$1,985.80$1,985.80
USAA$4,775.09$5,170.04$2,235.59$2,376.51$1,683.17$1,685.90$1,619.86$1,600.72

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If looking at this chart has you concerned about your prospects of purchasing cheap insurance, there’s no need to panic. There are plenty of other means at your disposal that can help you get the coverage you need to protect your vehicle while staying within the constraints of your budget.

What can drivers do to lower their auto insurance rates?

While you should always try to drive safely and keep your credit score at a healthy level, you should also make sure that you are taking advantage of every discount you qualify for. The next time you compare auto insurance online, review the discounts that different companies offer you.

Below you can see just how much you can save with certain insurance companies when you take time to add every discount you qualify for onto your policy:

Auto Insurance Discounts Available by Company and Discount Amount

Discounts21st Century Discount AmountAAA Discount AmountAllstate Discount AmountAmerican Family Discount AmountAmeriprise Discount AmountAmica Discount AmountCountry Financial Discount AmountEsurance Discount AmountFarmers Discount AmountGeico Discount AmountLiberty Mutual Discount AmountMetLife Discount AmountNationwide Discount AmountProgressive Discount AmountSafe Auto Discount AmountSafeco Discount AmountState Farm Discount AmountThe General Discount AmountThe Hanover Discount AmountThe Hartford Discount AmountTravelers Discount AmountUSAA Discount Amount
Adaptive Cruise Control and/or Headlights----------5%--------3%--
Anti-lock Brakes--10%-3%5%-5%-5%5%5%5%-5%-5%8%5%3%--
Anti-Theft--10%-3%25%10%25%-25%20% off of comprehensive portion of policy.10% -- this discount factors in features such as VIN etching and vehicle recovery;
one anti-theft discount applies.
25%; combined with vehicle recovery discount.---15% discount off of comprehensive coverage; higher discount with "engine cut-off."8%; one total anti-theft discount applies; if vehicle recovery, a higher discount applies.5%3%--
Claim Free--35%----25%-26% for going five years without an accident.Awarded "accident free" on account for lower rating.20% if claim/violation free:
"Superior Driver"
3+ yrs=12%
"MetRewards"
5+ yrs 20%
AND
save $50 each claim-free year up to $250 (off deductible).
10%-10% if you go six months without filing a claim;
one safe driver/claim free discount applies.
20% "Safeco Safety Rewards" if you have no at-fault accidents in the last 36 months,
no more than 1 point on your license, and
no DUI in the last ten years; one safe driver/claim free discount applies.
15%; must have State Farm for at least three consecutive years without an accident.-15%-23%; must be accident and violation free to get the "Safe Driver" discount listed below;
must be accident and violation free to qualify:
23% - 5 years
10% - 3 years;
one safe driver/claim free discount applies.
12%; "Premier Driver Discount"
4%-12%, depending on driving record;
12% is for being accident and violation free for five years; one safe driver/claim free discount applies.
Not available in HI.
Continuous Coverage-----3%-------No gaps or cancellations;
discount depends on how long you have been consistently insured.
10% for going six or more months with no more than a 30-day coverage gap.7% if you have been with Safeco or previous provider for one year or longer; five or more years gets you the highest discount.--10%; discount applies at each renewal.-15%-
Daytime Running Lights--2%------1%5%5%5%-5%---5%3%--
Defensive Driver5%-10%10%-5%5%10%--10%7%5%10%10%5%5%8%5%10%10%3%
Distant Student--35%---------10%--15%--5%3%7%-
Driver's Ed--10%--5%10%---10%10%-10%10%5%15%8%5%3%8%3%
Driving Device/App--20%40%---25%--30%15%40%20%-30%50%--10%30%5%
Early Signing--10%---10%10%---15%8%--8%----10%12%
Electronic Stability Control--2%--5%----5%-----------
Emergency Deployment---------25%------------
Engaged Couple------10%---------------
Family Legacy-----5%---------------10%
Family Plan------25%-----25%------5%--
Farm Vehicle--10%-------------------
Fast 5-------5%--------------
Federal Employee---------8%10%-----------
Forward Collision Warning-----8%----5%--------3%--
Full Payment--10%--4%-10%--$5---5%15%-8%15%20%7.5%-
Further Education-------15%--10%-15%---------
Garaging/Storing---------------------90%
Good Credit------------"Financial Stability"
gets you a lower rate. You must also have stable residence.
-------
Good Student--20%--10%25%10%-15%22.5%15%10%-10%15%25%8%5%3%8%3%
Green Vehicle--10%-----5%-10%--------3%10%-
Homeowner-----5%12%----2%5%-10%10%3%5%5%-5%-
Lane Departure Warning-------------Safety features get automatic discounts applied when VIN entered in system. --------
Low Mileage-----10%-15%-------20%30%-----
Loyalty-----5%------5%--7%---5%--
Married--------------5%-------
Membership/Group-7%--15%-----10%-7%------20%--
Military-------25%-15%4%15%--25%-------
Military Garaging---------------------15%
Multiple Drivers-------------------5%--
Multiple Policies--10%--15%25%--10%20%10%10%12%-15%17%15%10%20%13%-
Multiple Vehicles-----15%15%--25%10%-20%10%15%15%20%15%5%5%8%-
New Address----------5%-----------
New Customer/New Plan-----------10%--10%-------
New Graduate----------5%-----------
Newer Vehicle--30%---10%---------40%--3%10%12%
Newly Licensed----------5%-----------
Newlyweds----------5%-----------
Occasional Operator---------------------Discount based on operator's individual driving record.
Occupation------10%---10%-15%------10%--
On Time Payments--5%-----------------15%-
Online Shopper-------11%-----7%--------
Paperless Documents- -10%--2%------5%$50-`-------
Paperless/Auto Billing-5%--2%-----25%$30-$410%$28%2%$53%3%
Passive Restraint--30%30%3%30%-33%-40%-5%20%-5%2%40%8%5%3%--
Recent Retiree----------4%--------3%--
Renter-----2%-30%--------------
Roadside Assistance-------5%--------------
Safe Driver--45%--15%-40%15%-12%35%31%10%20%15%---23%12%
Seat Belt Use---------15%------------
Senior Driver--10%--------10%-----5%5%---
Stable Residence-------------------5%--
Students and Alumni-------15%--10%-7%---------
Switching Provider-------5%--10%10%--10%--5%5%---
Utility Vehicle--15%-------------------
Vehicle Recovery--10%-5%10%-25%-25%35%10%25%---5%8%-3%--
VIN Etching----------5%10%----------
Young Driver------10%--------------$75

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Remember, there’s nothing like driving safely to keep your insurance rates at a reasonable level but taking the time to update your policy and get the discounts you deserve can also reap massive rewards.

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Fully Paid-Up Auto Insurance: The Bottom Line

Drivers who decide to pay for their policy upfront have a policy that is fully paid up and will receive a paid-in-full discount from most insurance companies. You can earn more discounts from insurance companies by driving safely and taking courses to improve your defensive driving skills.

Of course, paying for your policy in full also means that you could get a refund which you could use to pay for a cheaper policy if you find one online. If you need to shop for a new policy, make sure that you are filling out your quotes accurately so you can make the best decision for your insurance needs.

Enter your ZIP code to get free fully paid-up auto insurance quotes today.

Free Auto Insurance Comparison

Enter your ZIP code below to compare auto insurance rates.

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