What does it mean when a policy is fully paid up? 2024 (What You Should Know)
Curious about what does it mean when a policy is fully paid up? A fully paid-up policy means paying your entire car insurance premium upfront in one lump sum. Paying your car insurance in full upfront can save you up to 10% and streamline your budget by eliminating monthly fees.
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Insurance Agent
UPDATED: Nov 4, 2024
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Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn’t influence our content. Our opinions are our own.
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: Nov 4, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn’t influence our content. Our opinions are our own.
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Understanding what does it mean when a policy is fully paid up can significantly impact your insurance savings. Paying your car insurance paid in full up-front often unlocks discounts of up to 10% and simplifies your budgeting by eliminating monthly fees.
Our guide delves into the benefits of choosing a fully paid-up policy and helps you find the best rates. Discover top companies offering competitive rates and explore how paying in full can work to your advantage.
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.
When you choose a paid-up option, you pay one lump sum for the entire policy period, and many insurers offer a discount for this. To gain further insights, read our “Car Insurance Discounts“. If you can’t wait to start shopping for fully paid-up insurance quotes, enter your ZIP code to get free auto insurance quotes.
- The fully paid up policy meaning can help you save with a lump-sum payment
- Paying in full avoids monthly fees and simplifies budgeting
- Compare quotes to find the best rates for a fully paid up policy
The Concept of 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. To gain further insights, see our guide titled “Claim-Free Discount: How Much Can You Save?“.
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Understanding Full Coverage and Policy Payment Options
When considering your car insurance policy paid in full, it’s important to understand the policy paid in full meaning and the various benefits it offers. Car insurance paid in full typically means settling your premium for the entire policy term upfront, which can sometimes lead to benefits of paying car insurance in full, such as avoiding monthly payment fees and potentially receiving a discount.
To learn more, read our “How does an auto insurance company determine my premium?”
This can also be advantageous when reviewing your car insurance comparison chart to evaluate whether a full coverage car insurance policy might be a better fit for your needs.
Although the average liability car insurance cost might be lower, benefits of full coverage auto insurance include comprehensive protection against a broader range of risks. Understanding full coverage car insurance requirements ensures you know exactly what is covered under your plan.
Additionally, understanding the car insurance deductible explained helps in determining how much you need to pay out-of-pocket before your coverage kicks in. A full coverage insurance example would show that it typically includes liability, collision, and comprehensive coverage, providing extensive protection.
If you decide to pay your car insurance policy in full, you should be aware of the car insurance refund policy in case you need to cancel or modify your policy early. By paying upfront, you may also simplify managing your budget, as you won’t have to worry about monthly payments or interest charges.
The Benefits of Purchasing 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.
Understanding the fully paid-up policy meaning can lead to savings of up to 10% by paying your premium in one lump sum, avoiding monthly fees and simplifying your budget.
Brad Larson Licensed Insurance Agent
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.
Read more: Is full coverage really full?
Understanding 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. For more information, read our “Average Auto Insurance Cost“.
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. Check our comprehensive guide titled “Is it bad to get an auto insurance quote online?” to learn more.
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:
Auto Insurance Monthly Rates by Provider, Age, & Gender
| Insurance Company | Age: 17 Female | Age: 17 Male | Age: 25 Female | Age: 25 Male | Age: 35 Female | Age: 35 Male | Age: 60 Female | Age: 60 Male |
|---|---|---|---|---|---|---|---|---|
| Allstate | $809 | $974 | $375 | $390 | $304 | $306 | $300 | $300 |
| American Family | $717 | $945 | $376 | $431 | $256 | $287 | $243 | $280 |
| Farmers | $620 | $780 | $289 | $310 | $250 | $275 | $238 | $260 |
| Geico | $498 | $513 | $245 | $242 | $226 | $245 | $220 | $252 |
| Liberty Mutual | $750 | $850 | $300 | $325 | $280 | $295 | $260 | $270 |
| Nationwide | $555 | $712 | $230 | $249 | $196 | $199 | $173 | $183 |
| Progressive | $867 | $967 | $244 | $247 | $206 | $195 | $184 | $187 |
| State Farm | $448 | $572 | $202 | $207 | $185 | $185 | $165 | $165 |
| Travelers | $670 | $750 | $270 | $285 | $240 | $255 | $220 | $230 |
| USAA | $398 | $431 | $186 | $198 | $140 | $140 | $135 | $133 |
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.
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Ways Drivers Can 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
| Discount Name | Allstate | American Family | Farmers | Geico | Liberty Mutual | Nationwide | Progressive | State Farm | Travelers | USAA |
|---|---|---|---|---|---|---|---|---|---|---|
| Adaptive Cruise Control | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Adaptive Headlights | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Anti-lock Brakes | 10% | ✓ | ✓ | 5% | 5% | 5% | ✓ | 5% | ||
| Anti-Theft | 10% | ✓ | 23% | 20% | 25% | ✓ | 15% | |||
| Claim Free | 35% | ✓ | ✓ | 26% | ✓ | 10% | ✓ | 15% | 23% | 12% |
| Continuous Coverage | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 15% | ✓ | ||
| Daytime Running Lights | 2% | ✓ | 3% | 5% | 5% | ✓ | ✓ | |||
| Defensive Driver | 10% | 10% | ✓ | ✓ | 10% | 5% | 10% | 5% | 10% | 3% |
| Distant Student | 35% | ✓ | ✓ | ✓ | ✓ | 10% | ✓ | 7% | ||
| Driver's Ed | 10% | ✓ | ✓ | ✓ | 10% | ✓ | 10% | 15% | 8% | 3% |
| Driving Device/App | 20% | 40% | ✓ | ✓ | 30% | 40% | 20% | 50% | 30% | 5% |
| Early Signing | 10% | ✓ | ✓ | ✓ | ✓ | 8% | ✓ | ✓ | 10% | 12% |
| Electronic Stability Control | 2% | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | |
| Emergency Deployment | ✓ | ✓ | ✓ | 25% | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Engaged Couple | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Family Legacy | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 10% |
| Family Plan | ✓ | ✓ | ✓ | ✓ | ✓ | 25% | ✓ | ✓ | ✓ | ✓ |
| Farm Vehicle | 10% | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
| Fast 5 | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Federal Employee | ✓ | ✓ | 12% | 10% | ✓ | ✓ | ✓ | ✓ | ||
| Forward Collision Warning | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | |
| Full Payment | 10% | ✓ | ✓ | $50 | ✓ | ✓ | ✓ | 8% | ✓ | |
| Further Education | ✓ | ✓ | 10% | 15% | ✓ | ✓ | ||||
| Garaging/Storing | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 90% | ||
| Good Credit | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
| Good Student | 20% | ✓ | 15% | 23% | 10% | ✓ | 25% | 8% | 3% | |
| Green Vehicle | 10% | ✓ | 5% | ✓ | 10% | ✓ | ✓ | ✓ | 10% | ✓ |
| Homeowner | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | 3% | 5% | ✓ | |
| Lane Departure Warning | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Life Insurance | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Low Mileage | ✓ | ✓ | ✓ | 30% | ||||||
| Loyalty | ✓ | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | |
| Married | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
| Membership/Group | ✓ | ✓ | ✓ | 10% | 7% | ✓ | ✓ | |||
| Military | ✓ | ✓ | 15% | 4% | ✓ | ✓ | ||||
| Military Garaging | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 15% |
| Multiple Drivers | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Multiple Policies | 10% | 29% | ✓ | 10% | 20% | 10% | 12% | 17% | 13% | |
| Multiple Vehicles | ✓ | ✓ | 25% | 10% | 20% | 10% | 20% | 8% | ||
| New Address | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| New Customer/New Plan | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
| New Graduate | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| New Vehicle | 30% | ✓ | ✓ | 15% | ✓ | 40% | 10% | 12% | ||
| Newly Licensed | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Newlyweds | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Non-Smoker/Non-Drinker | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Occasional Operator | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Occupation | ✓ | 10% | 15% | ✓ | ✓ | ✓ | ||||
| On-Time Payments | 5% | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 15% | ✓ | |
| Online Shopper | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 7% | ✓ | ✓ | ✓ |
| Paperless Documents | 10% | ✓ | ✓ | ✓ | 5% | $50 | ✓ | ✓ | ✓ | |
| Paperless/Auto Billing | 5% | ✓ | ✓ | ✓ | $30 | ✓ | $20 | 3% | 3% | |
| Passive Restraint | 30% | 30% | 40% | 20% | ✓ | 40% | ||||
| Recent Retirees | ✓ | ✓ | ✓ | ✓ | 4% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Renter | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Roadside Assistance | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Safe Driver | 45% | ✓ | 15% | ✓ | 35% | 31% | 15% | 23% | 12% | |
| Seat Belt Use | ✓ | ✓ | ✓ | 15% | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Senior Driver | 10% | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
| Stable Residence | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Students & Alumni | ✓ | ✓ | ✓ | 10% | 7% | ✓ | ✓ | ✓ | ||
| Switching Provider | ✓ | ✓ | 10% | ✓ | ✓ | ✓ | ✓ | |||
| Utility Vehicle | 15% | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
| Vehicle Recovery | 10% | ✓ | ✓ | 15% | 35% | 25% | ✓ | 5% | ||
| VIN Etching | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | |||
| Volunteer | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Young Driver | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | $75 |
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.
Read more: Adaptive Headlights Discount: How Much Can You Save?
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. For more information, check our “Cheap Auto Insurance Companies“.
Frequently Asked Questions
What does it mean when your policy is paid in full for car insurance?
When your car insurance policy is paid in full, it means you’ve paid the entire premium amount upfront for the policy term, rather than making monthly or quarterly payments. This often comes with the benefit of avoiding installment fees and may offer a discount.
What happens after I pay off my car insurance?
After paying off your car insurance, you will have completed all necessary payments for the policy term. Your coverage will remain active until the policy’s end date, and you may receive confirmation of payment and an updated policy document.
What does full coverage car insurance cover?
Full coverage car insurance typically includes liability coverage, comprehensive and collision coverage. This combination protects against damage to your vehicle, damage to others’ property, and injuries resulting from an accident.
Can I split my car insurance payment?
Yes, many insurance companies, including Progressive, offer the option to split your car insurance payments into monthly or quarterly installments. However, this may incur additional fees.
Can you cancel Progressive insurance online?
Yes, you can usually cancel your Progressive insurance policy online through their website or customer portal. You may need to log in to your account and follow the cancellation instructions.
Can you pay a life insurance policy in full?
Yes, you can pay a life insurance policy in full by making a lump-sum payment for the entire policy term. This option is available for some types of life insurance policies and can sometimes result in a discount.
What does it mean when your auto policy is paid in full with Progressive?
When your auto policy is paid in full with Progressive insurance, you’ve settled the entire premium amount for the policy term at once. This can sometimes lead to savings, as Progressive may offer discounts for full payments and it eliminates the need for monthly payments.
Can you pay car insurance early?
Yes, you can generally pay your car insurance early. Paying ahead of schedule can help you avoid missing payments and might provide financial flexibility. It’s advisable to check with your insurer for any potential impacts on your policy or premiums.
Can you pay car insurance yearly?
Yes, many insurance providers offer the option to pay your car insurance annually. This can often result in a discount compared to paying monthly or quarterly.
Can you pay half of your car insurance?
Yes, many insurers allow you to pay half of your car insurance premium upfront with the remaining balance due at a later date. This option is often available with an installment plan.
To learn more, read our “Is it a bad idea to pay all at once on auto insurance?“.
Can you pay life insurance in full?
Yes, you can pay a life insurance premium in full, depending on the policy and insurer. Paying the entire premium upfront can sometimes offer a discount and avoid installment fees.
Does full coverage include comprehensive?
Yes, full coverage car insurance generally includes comprehensive coverage. Comprehensive coverage protects against non-collision-related damages such as theft, vandalism, or natural disasters.
Does full coverage include uninsured motorist coverage?
Full coverage insurance may include uninsured motorist coverage, but it’s not guaranteed. It’s essential to verify with your insurer whether this coverage is part of your policy or if it needs to be added separately.
For more information, read our “UM/UIM Auto Insurance Coverage“.
Does full coverage insurance cover any car you drive?
No, full coverage insurance typically applies to the vehicle listed on the policy. If you drive another car, you may need additional coverage or to be listed as a driver on that vehicle’s policy.
Does full coverage insurance cover rental cars?
Full coverage insurance usually does not extend to rental cars unless specified. It’s important to check with your insurance provider or consider purchasing rental car insurance for additional protection.
Does full coverage insurance cover uninsured motorist?
Yes, full coverage insurance can include uninsured motorist coverage, but it may not be automatically included. You should confirm with your insurer to ensure you have this protection.
To learn more, read our “Types of Auto Insurance Coverage“
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
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.