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

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When your car insurance policy is fully paid up, it means that your coverage is up-to-date, and you don’t owe any more premium payments until your next renewal date.

But how does paid-up insurance impact your California car insurance rates?

Depending on the company, drivers can save money with paid-up car insurance, 11% or more.

Keep reading if you’re curious about how to save money on car insurance with a fully paid-up policy. Our guide covers which car insurance companies offer a paid-up option and where you can find the cheapest car insurance in California.

If you’re ready to compare California car insurance quotes right now, enter your ZIP code above to get quotes from local companies for free.

What does it mean when a policy is “fully paid up”?

With paid-up insurance, you pay your total annual rate all at once. You can fully pay up your policy online, over the phone, or by mail with a check or money order. With certain companies, fully paid-up car insurance qualifies for a discount. 

When your insurance is fully paid up, you can drive confidently knowing that you’re covered by your insurance policy. You’ll never be charged late fees because you won’t forget a monthly payment, and you won’t have to worry about a lapse in coverage as long as you remember to renew your policy at the end of the year. 

Take a look at the table below to see how fully paid-up insurance can impact your car insurance rates with the top California car insurance companies:

Car Insurance CompanyAnnual RatesBi-Annual RatesMonthly Rates
AAA North CA$2,553$426$179
AAA South CA$2,149$179$213
Allstate$2,432$405$203
Farmers$2,414$402$201
GEICO$1,755$293$146
Mercury$1,731$289$144
Nationwide$1,349$225$112
Progressive$1,850$308$154
State Farm$2,298$383$192

This table shows how much it will cost for fully paid-up insurance compared to making monthly payments.

How much is car insurance in California per month? On average, California drivers pay $172 per month for full coverage car insurance. That translates to about $2,056 per year. 

However, your car insurance rates will vary based on your driving record and how much coverage you carry.

California law requires drivers to carry at least 15/30/5 in liability car insurance, which comes with the cheapest rates. Full coverage car insurance in California costs more but includes liability, comprehensive, and collision coverage. 

Most of the companies listed above offer cheaper-than-average California auto insurance. Still, you should shop around with at least three different companies to find the most affordable paid-up insurance option. 

What happens if you pay your car insurance in full?

With fully paid-up car insurance, you can drive with confidence, knowing that your insurance policy covers you. You won’t forget a monthly payment, and you won’t have to worry about a lapse in coverage as long as you remember to renew your policy at the end of the year.

However, don’t buy paid-up car insurance just for a discount. It’s important to find coverage that fits both your needs and budget.

Insurance companies want drivers to have fully paid-up policies because they receive a large lump sum of cash upfront. You may never use these premiums if you never file a claim, but the insurance company keeps it regardless.

Rather than spend all of your money upfront, shop around and find the right company with the right price. Drivers can get cheaper car insurance rates by switching companies every few months, and you may qualify for California low-cost car insurance no matter how you decide to pay.

Are there discounts for fully paid-up car insurance in California?

Yes, most car insurance companies offer discounts for fully paid-up policies. From the table above, about half of them offer fully paid-up discounts:

  • AAA – 5%
  • Allstate – 10% 
  • Farmers – 6%
  • Progressive – 11%

Fortunately, many more insurers offer this discount. For example, Mercury car insurance doesn’t list its discount amount online but advertises that drivers earn discounted rates for paying in full. 

So, even if you don’t see a discount listed, don’t hesitate to ask about paid-in-full discounts before you buy. You may find that smaller local companies offer this discount and more affordable car insurance rates.

Fully Paid-Up California Car Insurance: The Bottom Line

Suppose you have a good driving record and your car insurance company offers a hefty discount. In that case, you can save money on your California car insurance rates with a fully paid-up policy.

Some insurers might reward drivers for paid-up insurance with discounts. Alternatively, other companies charge fees to process monthly payments.

Before you buy car insurance, always ask your insurer about the preferred payment method. Ask if monthly payments are available or if you can earn a discount for choosing the paid-up insurance option. If you’re not sure your insurance company offers a fully paid-up discount, comparison shop online to find more affordable California car insurance companies.

Frequently Asked Questions About Fully Paid-Up Insurance In California

Keep reading to learn more about the fully paid-up meaning in insurance:

#1 – What are paid-up additions?

Paid-up additions refer to the additional whole life insurance coverages you add to an existing policy and pay for with the policy’s own dividends. 

Fully paid up still means you paid all of your premiums ahead of time and are no longer responsible for making payments. However, life insurance paid-up additions are paid for by the life insurance policy’s dividends, while car insurance still must be paid by the policyholder.

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