In the coming months, State Farm auto customers may receive a refund through a $5 billion dividend the insurance company is paying out.
State Farm Mutual Automobile Insurance Company announced on Feb. 26 that it will be paying $5 billion back to customers through a dividend, starting this summer.
Policyholder dividends are returns of policyholder premiums, or payments, according to the International Risk Management Institute. These dividends are a result from income in excess of losses and expenses.
State Farm’s dividend is possible through the company’s “financial strength and a stronger than expected underwriting performance,” a news release said.
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The payments will average about $100 per vehicle, varying per state and premiums paid, a news release states.
In its announcement, State Farm also shared that in 2025, auto customer rates were lowered by about 10% in 40 states due to a decrease in auto repair costs and frequency of collisions.
As of Feb. 27, State Farm had not shared details on who is eligible for the payment this summer. The insurance company said the dividend will be paid to owners of more than 49 million auto vehicles across its network.
The insurance company also did not say exactly when this summer customers could expect a payment. USA TODAY has reached out to State Farm for more information.
Greta Cross is a national trending reporter at USA TODAY. Story idea? Email her at gcross@usatoday.com.
This article originally appeared on USA TODAY: State Farm announces $5 billion dividend. What to know about refunds.