What Is the Paid-In-Full Discount?

Most insurers let you choose how you pay for car insurance, but you can get a discount if you pre-pay your entire premium in advance. Learn more here.
Man making car insurance payment

Car insurance companies allow flexibility in how you pay your premium. You can do so monthly or with one check. Insurers prefer the latter and reward those who do with the paid-in-full discount.

It’s preferable for your provider if you pay for your policy in advance. This is because, when you do so, it exposes them to less risk. And, as a result, you’ll receive a cheaper premium.

This article will explain how you can get a discount when you for pay for your auto insurance coverage upfront. You’ll learn how to qualify and how much you can save. We’ll also explain the pros and cons of paying off your entire premium at the beginning of the policy term. Finally, you’ll learn about which companies offer this reward.

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How to Get a Discount for Pre-Paying Your Policy

Auto insurance is expensive, especially if you buy coverage that goes beyond your state’s minimum requirements. But in most cases, you’ll need a policy to drive. Luckily, there are plenty of discounts that you can use to lower your rates. They slice a percentage off of your premium. And you can often qualify for many others to save more.

Pre-paying a good way to lower your rates. You should definitely take advantage if you have the money on hand and this discount is available. All you’ll need to do is make sure you your provider enough to cover your premium in advance. The amount you can save depends on your insurer and state. This is not available in California.

When your insurer says that you have no outstanding balance, it’s referring to a six-month term. You may also see carriers refer to this as semi-annual. Others might allow you to remit quarterly. Most companies provide this information when you’re setting up your policy.

Paying-In-Full vs. Making Monthly Payments

It’s no secret why anyone would want to settle their account in full. But there are some reasons you might prefer monthly billing. Here we look at the advantages and disadvantages of both methods:


  • Less stress. You won’t need to worry about missing payments. Instead, you’ll be able to lock up your coverage for months. Zeroing out your balance always feels good and reduces anxiety.
  • Discount. Many insurers lower rates if you completely pay off your premium. It can help you save a little extra each billing cycle.


  • You’ll have less money on hand. It’s never fun watching the dollars disappear from your checking account. So, it’s definitely a con when you send your insurer a lump sum payment. This can amount to hundreds of dollars. This might be hard to handle if you don’t have a lot of cash on hand.

Choose the Payment Plan That’s Best for You

The bottom line is that you should go with the payment schedule you feel most comfortable with. Even so, it’s a good idea to take advantage of any savings offered. You’ll have less worry about missing insurance premium installments and risking your standing with your provider.

However, sending a little money each month can also be a smart choice. You won’t have to foot the whole bill right away. You can just make monthly installments. This helps you have more cash on hand each month. And for some, less anxiety. Insurers also offer a similar discount for electronic or automatic billing each month. However, they’re usually only for customers that make monthly payments.

How Much the Paid-in-Full Discount Saves

There are a lot of good reasons to make a single payment for your premium. Getting a discount is at the top of the list. Insurers don’t always publish details about them online. Availability and savings vary quite a bit by state and person. That makes it hard to provide a dollar amount or percentage saved. Savings from a single company depend on your personal details.

Our research shows that you can save anywhere from 5% to 15% when you prepay. For instance, Infinity says that it saves policyholders between 5% and 11%. Ask your agent if sending a lump-sum qualifies you for any savings.

Insurance Companies With a Fully Paid Discount

Many of the top car insurance companies offer a discounted rates for paying in full. But they may offer different savings. They might also run their programs in different ways.

Here’s a list of major insurers that offer the paid-in-full discount:


Progressive lowers rates about 11% when you pay in advance, but how much this discount saves you depends on your personal details, as well as the state that you live in.

Liberty Mutual

The Liberty Mutual preferred payment discount rewards customers who settle their policy in one or two installments. Liberty Mutual doesn’t list a percentage of savings on its website. This indicates that it’ll depend on you and your state. Be sure to speak with your agent about how much you should save.


Travelers reduces qualifying policyholders premiums about 9% when they prepay. When you’re setting up your policy, make sure to ask your agent how to choose a payment plan that qualifies. You should also ask them about how much you save by making a single deposit.


Allstate FullPay provides a discount of about 9% if you fully paid your premium. All you’ll need to do is make sure you have no outstanding balance before your policy period begins. Once you’ve settled up, you’ll see your bonus.


The Farmers paid-in-full discount puts up to 6% back in your pocket. You qualify when you zero the balance of your account at the beginning of the policy term. Your Farmers agent will likely have more info about how much you’ll save.


Erie offers a perk for paying your policy in one lump sum. It rewards qualifying policyholders by lowering rates by about 9%. It’s perfect for those that prefer getting the best deal. Be sure to contact Erie for more details.


Dairyland offers a sweet incentive called the “payment frequency discount.” It’s basically the same thing, but you may select options besides month-to-month or making one lump sum deposit.


Mercury will reduce your premium if you settle it in advance . If this is how you prefer dealing with your billing, be sure to take advantage.


New Jersey Manufacturers, or NJM, prefer it when you settle your premium with a lump sum payment. The company will reduce your rates when you do. Savings are usually small, but even small ones add up. Contact NJM for more details.


When you settle your premium’s balance upfront, Amica rewards you. There isn’t much information about it on the insurer’s website. Savings often vary from state to state. To learn more about these savings, contact Amica or ask an agent.


Kemper also lowers rates when you pre-pay your policy. Contact Kemper to find out how much you can save when you skip the monthly remittance check.

The Hanover

The Hanover also offers policyholders a deal when they pay their premium upfront. There are few details on the company’s website. So, you’ll need to contact The Hanover to learn more.


Shelter lowers rates by 10% when you pre-pay for each policy term. You have the option of remitting once a year or every six-month term to qualify.

Keep in mind that these aren’t the only companies who have this discount. They’re just some of the most common ones that offer it. Other insurers might also offer this reward, including local carriers. That’s one reason why you should do a quote comparison from time to time. Comparing can help you find better discounts and rates.

Paid-in-Full Discount by Company

Insurance CompanyMax Savings
Liberty Mutual5-15%
The HanoverVaries
Note: table data found on the above insurers’ websites.

Frequently Asked Questions

Does pre-payment make your premium cheaper?

Your premium will be cheaper and more affordable if your insurer offers a discount for pre-paying your premium. The savings aren’t significant, usually just a few percent of your total bill, but every bit helps. This perk isn’t offered by every insurance company, though.

When shopping for auto insurance, ask your agent if you can make a single payment and and receive a discount. Remember that this means you’ll be on the hook for the entire bill all at once. Only do it if you can afford to.

How far in advance do you need to pay to qualify?

In general, your account must be paid to zero for six months in advance. Insurers often provide quarterly and monthly payment plans. However, six-month terms are standard. Some insurance companies even offer 12-month options. It’s a smart idea to consult with your agent before you make any decisions.


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