State Farm announces $100 average refund for car insurance customers
State Farm on Thursday announced a historic $5 billion dividend for auto insurance members, the largest dividend in the mutual insurer’s 103-year history.
“This dividend was made possible by State Farm Mutual’s financial strength and stronger-than-expected underwriting performance reported industrywide,” the company said in a statement. he said.
Customers can expect to receive an average refund of $100, although State Farm says the amount will vary by state and the amount of premium paid.
State Farm also reported that it reduced premiums by nearly 10% in 40 states, resulting in total cost savings for customers of $4.6 billion.
This is a trend in the motor vehicle insurance industry. Auto repair costs are starting to fall, and by 2025 the frequency of accidents will also decrease.
But car insurance premiums have increased. By early 2025, rates had increased by more than 50% in three years, according to the Bureau of Labor Statistics; This was the highest inflation in motor vehicle insurance in 50 years.
Affordability has become a primary concern for many customers, driving them to shop for better deals.
TransUnion recently released a report showing that insurance shopping has become a routine activity for consumers, rather than a rare occurrence caused by buying a car or home.
“It’s safe to say at this point that regular insurance shopping is the new normal,” Patrick Foy, senior director of strategic planning for TransUnion’s insurance business, told CNBC in an interview.
The main driving force behind the shopping rate is economic pressures that are pushing consumers to find ways to reduce household spending, the report said. At the same time, insurers are investing heavily in marketing and setting competitive prices.
travelers, Berkshire Hathaway Geico, Coke And chubby Competing with State Farm and USAA and other partners where customers are also shareholders.
Gradual In particular, it was pushing for State Farm’s dominance in the auto space and was among the leading auto insurers posting significant financial returns to customers in 2025. The company paid $1 billion in dividends to customers in Florida, where state law requires insurers to return excess profits.
USAA announced that it will pay $3.8 billion to its members in the states in 2025.
The auto insurance business represents 63% of State Farm’s property and casualty insurance business. Customer loyalty in auto insurance often leads to loyalty in homeowners insurance; State Farm told CNBC that its damage costs have not decreased and that it is still trying to charge adequate rates to compensate.
