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State Farm announced Thursday that it will pay the largest dividend in company history to auto loan customers, who are in line to receive $5 billion in cash back.
State Farm Mutual Automobile Insurance Company, also known as State Farm Mutual, said it will make a one-time distribution this summer to customers across over 49 million vehicles covered by State Farm Mutual auto policies.
The company’s dividend payments are expected to average $100 by vehicle and will vary based on the policyholder’s state of residence as well as the premiums they paid.
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State Farm announced that the $5 billion dividend for auto insurance customers will be its largest ever. (Justin Sullivan/Getty Images)
“As a mutual company with a customer-first focus, State Farm Mutual is able to provide value directly to our customers while maintaining financial strength to keep our promises in the future. That translated this year to lower auto rates and cash back in the form of a $5 billion policyholder dividend,” said Jon Farney, State Farm Mutual president and CEO.
State Farm’s announcement also noted that a downward trend in auto repair costs as well as the frequency of collisions in 2025 allowed the company to lower auto rates in 40 states.
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Auto repair costs have eased recently but have outpaced inflation over the last year. ( Pia Bayer/picture alliance via Getty Images)
Auto insurance rate reductions are averaging 10% and State Farm Mutual noted that the total amount of savings on premiums for consumers totaled $4.6 billion.
The latest consumer price index (CPI) inflation data from the Bureau of Labor Statistics shows that motor vehicle insurance prices declined 0.4% from December to January.
Additionally, the CPI data showed that motor vehicle insurance prices were just 0.5% higher than they were a year ago.
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State Farm said that a decrease in collisions helped allow for lower rates as well as the dividend. (Matteo Della Torre/NurPhoto)
That figure is well below the overall CPI inflation data, which was up 2.4% on an annual basis in January.
Auto repair costs rose by a modest 0.2% in January on a monthly basis, though they were 5.7% higher than a year ago last month, BLS data showed.
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