February 27, 2026, 07:02 (CST) — Bloomington, Illinois.
- State Farm Mutual plans to return $5 billion to eligible auto policyholders through a cash-back dividend, with payouts averaging roughly $100 for each insured vehicle. Distributions begin this summer. PR Newswire
- The insurer’s auto rates have dropped by roughly 10% in 40 states, translating to about $4.6 billion a year in premium savings, according to the company. Insurance Business
- Auto insurance premiums dropped 6% nationwide in 2025, according to Insurify, which puts the average yearly full-coverage cost at $2,144. Insurify
State Farm Mutual Automobile Insurance Company plans to distribute a one-time $5 billion dividend to eligible auto policyholders, following a string of rate reductions in 40 states that the company says are saving drivers around $4.6 billion each year. The mutual insurer estimates payments will come out to roughly $100 per vehicle, covering more than 49 million insured cars. “As a mutual company with a customer-first focus, State Farm Mutual is able to provide value directly to our customers,” said CEO Jon Farney. State Farm Newsroom
Timing is key here: auto insurance has been a big-ticket item for households lately. But in January, the U.S. Consumer Price Index recorded a 0.4% dip in the motor vehicle insurance index—a rare move lower after years of rising costs. Bureau of Labor Statistics
Insurify also picked up on the wider shift, projecting that the average annual full-coverage premium dropped 6% in 2025, landing at $2,144, after a steep 46% surge from 2022 to 2024. The firm is looking for a modest 1% bump in 2026, putting the average at $2,158. “Insurers have to respond to risk,” said Matt Brannon, Insurify’s senior economic analyst and the author of its American Driver Report. Insurance Journal
Farney, speaking on a conference call, called the dividend the biggest State Farm has posted in its 103 years. “When State Farm does well, our customers do well,” he said. Chief operating officer Chris Schell pointed to lower repair costs and a drop in collisions as key drivers, saying the pattern ran “across the entire industry,” Axios reported. Axios
State Farm posted net income of $12.9 billion in 2025, with total revenue clocking in at $132.3 billion. State Farm Mutual finished the year with net worth at $170.0 billion. The turnaround in auto was stark: the division swung to a $4.6 billion underwriting gain, rebounding from a $2.7 billion loss in 2024. State Farm Newsroom
The payout comes as competition among auto insurers remains intense. State Farm leads the U.S. personal auto market by direct premiums written, trailed by Progressive, with Berkshire Hathaway’s insurance group—GEICO included—rounding out the top three, per data from the Insurance Information Institute. III
Some insurers have spotlighted givebacks in their pitch. USAA, for instance, announced in December it would return roughly $3.7 billion in financial rewards to members in 2025, then updated that figure to $3.8 billion. USAA News
State Farm isn’t new to using dividends when loss trends or driving habits change. The insurer’s last big auto dividend—$1.9 billion—came in the pandemic, according to WGLT. Farney noted the company “managed through that period with discipline” before it returned cash to policyholders. WGLT
Still, the auto gains don’t wipe out risk on other fronts. According to Claims Journal, which quoted the company, State Farm’s homeowners and broader property and casualty segments booked a $3.1 billion underwriting loss for 2025, hit by Los Angeles wildfire claims and “intense storms.” “We don’t have shareholders; we don’t have a stock price to protect,” Farney said. Even so, heavy catastrophe losses have a way of forcing prices higher. Claims Journal
ABC7 Chicago reported that dividend checks are set to roll out this summer, with the average payout landing near $100 per vehicle. State Farm noted the actual amount depends on both the state and the premiums drivers have paid. abc7chicago.com
