Millions of drivers with State Farm could soon see payouts on average of $100 per vehicle, according to a recent announcement from the company.
State Farm Mutual announced Thursday that it would pay $5 billion in cash back to qualifying auto customers through a dividend, calling it a “one-time distribution” to more than 49 million drivers.
The company said the payouts were being distributed due to “a stronger than expected underwriting performance,” calling them the “largest dividend in company history.”
While the payments will vary by state and premiums paid, they are expected to average $100 per vehicle, the company said. State Farm did not immediately respond to requests for comment surrounding what Illinois payouts could look like and which customers qualify.
“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,” State Farm Mutual President and CEO Jon Farney said in a statement.
While the company touted a drop in auto insurance rates, the announcement comes months after State Farm revealed plans for a substantial rate hike for homeowners due to what it said was an increase in catastrophic weather events.
The change marked one of the largest increases in Illinois history, according to the Chicago Tribune.
“Home insurance rates are on the rise in Illinois due to rising home replacement costs and more frequent severe weather events that are driving up the cost and frequency of claims,” State Farm said in a notice on its website. “These changes reflect broader trends in loss patterns and repair costs and are necessary to help ensure we can continue providing reliable coverage to our policyholders.”
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