What Is the Paid-In-Full Discount?

Many major auto insurers offer discounts for paying your premium in full before the policy period begins. Find out which companies offer these savings and how much you can save.
Man making car insurance payment

Car insurance companies allow flexibility in paying your premium. You can do so monthly or with one check. Insurers prefer the latter and reward those who do with a discount for paying in full. This is because, when you do so, it exposes them to less risk.

In this article:

How Pay-In-Full Discounts Work

Pre-paying your auto insurance is an easy way to lower your premium. You should definitely take advantage if you have the money on hand and a paid-in-full discount is available. All you’ll need to do is make sure you square your account in advance. The amount you can save depends on your insurer and state. This reward 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 insurance carriers refer to this period 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. Monthly Payments

It’s no secret why anyone would want to settle their account in full. But there are some good 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 offer a discount 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 It Saves

There are many good reasons to make a single payment for your auto insurance twice a year rather than making monthly payments. 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 the paid-in-full discount can save anywhere from 5% to 15% on your car insurance premium. 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.

Insurers With Paid-In-Full Discounts

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 pay-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 pay off 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.

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 must you pay to qualify?

In general, your account must be paid to zero for six months in advance to qualify for pay-in-full auto insurance discounts. Insurers often provide quarterly and monthly payment plans. However, six-month terms are standard. Some 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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