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Great 8 Tip #2 - Pay-in-Full
Jeff Ryan - CLU, ChFC, AIA, CIC, CPCU
July 4, 2024
In recent years, companies have implemented discounts for paying insurance policies in full (or annually) for some types of insurance. Many companies offer this option, especially for their auto policies.
A Paid-In-Full discount allows customers to avoid installment fees and a reduction in the annual premium amount due.
Not all policy types have this discount (homeowners policies typically do not), so it is a good idea to ask your agent if the option is available.
Here’s a Real-World Example:
- Auto Policy Paid Monthly or Quarterly: $2,135/year
- Auto Policy with Paid in Full Discount: $1,908/year
- Annual Savings: $227 (over 10%)
- That amount may not include additional billing fees associated with alternative payment plans.
Other payment discounts might be available and worth your consideration:
- Electronic Funds Payment (EFT/ACH) - Many companies will waive or reduce billing fees if you set up your account with an automatic payment plan.
- This payment plan also helps prevent accidental cancellations or late payment surcharges.
- Reduced Billing Period—Other than Paid-In-Full, some companies will provide a lesser discount if you pay over a shorter time (say three months). This is an alternative to their Paid-In-Full discount spread over a slightly longer time frame.
Discounts vary depending on the amount of premium paid, type of policy, and company.
If you have the funds available to pay in full, this might be a great
SaveSmart
option, with the side benefit of reducing the mail you receive from insurance companies!
About the Author: Jeff Ryan has been a licensed insurance agent since 1978, later becoming a full-time insurance professional in 1983. Since then, he has been the principal of The Ryan Agencies with offices in Hornell, Jasper, and Wellsville. The agencies serve approximately 15,000 clients in New York and Pennsylvania. Jeff holds numerous credentials including the Chartered Property & Casualty Underwriter (CPCU), Certified Insurance Counselor (CIC), Accredited Advisor in Insurance (AAI), Chartered Life Underwriter (CLU), and Chartered Financial Consultant (ChFC) designations. He holds a Master's Degree from the American College. Jeff enjoys writing about all things insurance and welcomes your questions and feedback.
This article may have been originally published at Quora.com.
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