State Farm will pay a record $5 billion dividend to qualifying auto insurance customers this summer, with average payouts of about $100.
WASHINGTON — State Farm announced Thursday it will pay a historic $5 billion dividend to qualifying auto insurance customers, marking the largest dividend in the mutual company’s 103-year history.
The insurer said the one-time cash-back dividend is possible due to its financial strength and stronger-than-expected underwriting performance. The payments are expected to go out this summer and will vary by state and by the amount of premium paid.
According to Forbes, State Farm said customers do not need to take any action to receive their dividend. Policyholders may receive a check directly or be notified by email to initiate a digital payment. The cash back will not be issued as a credit.
Customers can expect refunds averaging about $100, though amounts will differ.
The payout comes as auto insurance affordability has become a major concern. By early 2025, motor vehicle insurance rates had climbed more than 50% over three years, the highest inflation in that category in 50 years, according to Bureau of Labor Statistics data cited by CNBC.
However, industry trends have recently improved. Auto repair costs have begun declining and accident frequency dropped in 2025. State Farm said it lowered auto premiums by about 10% across 40 states, totaling $4.6 billion in savings.
Insurance shopping has also become routine for many consumers. “At this point we can safely say that regular insurance shopping is just the new normal,” Patrick Foy, senior director of strategic planning for TransUnion’s insurance business, told CNBC.
State Farm reported total revenue of $132.3 billion in 2025, up from $123 billion the previous year, and net income of $12.9 billion, more than double its 2024 results.