What Is a Paid-In-Full Discount?

Many insurance providers offer a discount (usually 10 to 20%) if you pay for your annual policy in full rather than making monthly or quarterly payments.
Written by Jason Unrau
Reviewed by Carrie Adkins
You can get a discount for paying car insurance in full, rather than paying in monthly or quarterly increments—but it’s not available in every state or with every company.
  • You can pay in full or set up monthly payments to debit from your bank.
  • Many insurance providers offer a paid-in-full discount for their products. 
  • This discount could earn you up to 20% off your premium, depending on the company.
  • This discount is not available in California or New York.

Why do carriers offer paid-in full discounts?

Paid-in-full discounts are valuable for insurance companies—if you pay your entire premium at once, you can't miss a payment during the policy term. This is why many insurance providers are willing to give a discount for paying your insurance premium in full.

Get a paid-in-full discount and get up to 20% off your premium

Big picture: Enjoy up to 20% off your six months or annual premium, depending on the provider.
If you can afford a lump sum payment upfront, you will save a good chunk of change on the overall amount. Enrolling in the discount program is relatively easy, too!
When you pay in full for your policy, insurers like
offer discounts that can save you as much as 10% or even 20% on your insurance. That could be hundreds of dollars of annual savings!
Other insurance companies may not offer a paid-in-full discount—but you could still end up paying for making monthly payments, as is the case with
installment charges. In this case, you will still save money by paying for your year’s premiums in full.
Overall, you’re pretty much always going to keep some extra cash in your pocket if you pay in full. You can always switch to a new policy if your current company doesn’t offer this discount.
It’s a bad feeling to see an NSF charge on your bank statement and realize you forgot about one of your pre-authorized automatic payments. It means you are likely going to be assessed a charge from the bank, and also from the service provider.
If you’re low on cash, you might miss your autopay insurance—and this could mean that your
coverage inevitably lapses
, leaving you exposed. Not only will you be driving illegally without coverage, but your insurance rates might skyrocket after just a single day without insurance coverage.
You can sometimes pay for insurance with a credit card. However, you might have to pay additional fees.
Big picture: Paying once means you can stop worrying about insufficient funds each month.

What types of insurance offer pay-in-full discounts?

Many companies offer a lump sum discount for insurance products like homeowners, renters, and auto insurance. However, it depends on where you live and which insurer you choose. You can find paid-in-full discounts on:
  • Home insurance: Select providers offer home insurance discounts when you pay for your premiums in full. Allstate calls it a
    Responsible Payment Discount
    , for example.
  • Car insurance: Many
    car insurance providers
    offer paid-in-full discounts for vehicle owners who wish to get ahead of the game. Providers such as Liberty Mutual, Mercury Insurance, Allstate, and Farmers Insurance are all popular insurers who offer pay-in-full discounts.

States where paid-in-full discounts are not allowed

Excluded: California and New York
Only 48 of the 50 states permit paid-in-full discounts on an insurance policy. California and New York each have state laws that prevent car insurance companies from offering auto policy discounts based on when the premiums are paid. 
There are other car insurance discounts and coverage options available in these states: 
  • Good student discount (usually requires a B average)
  • Safe driving discount (rewards good driving habits and claim-free years)
  • Anti-theft devices
    car discount (for safety features like alarm systems)
  • Paperless discount
  • Electronic funds transfer (EFT)
    discount for scheduling automatic payments
Everywhere else in the country, policyholders can save some cash on their car insurance premium by paying up front. If you don’t qualify for any of these discounts, try raising your deductible if your financial situation allows it.
“Jerry got me the best price and provided a great service. I was able to switch my policy over to Progressive to get the same coverage for less!” —Miriam O.
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