FILE - Cars on Interstate 580 in Oakland, Calif.
BLOOMINGTON, Ill. - State Farm is issuing payouts to eligible auto insurance customers as part of a massive $5 billion policyholder dividend. It’s the largest dividend in State Farm Mutual’s more than 100-year history.
The Illinois-based carrier said the one-time payments are being distributed in waves to qualifying customers of State Farm Mutual Automobile Insurance Company.
Millions of its policyholders have already received their individual dividend payments, and more payments are on the way, the company said.
How much can customers expect?
How much money eligible customers will receive is based on a percentage of the premium paid for each qualifying policy last year.
Nationwide, the average payment was estimated to be about $100.
But the percentage varies by state and ranges from 4% to 10%, according to State Farm.
"The dividend percentage reflects the cost of risk and underwriting results in each state," the company explained on its website. "States where results were stronger will generally see higher percentages."
State Farm is the largest car insurer in California, according to findings from LendingTree and WalletHub.
What we don't know:
But it's unclear where California stands in the dividend percentage.
Why are the payments being made?
The payouts stem from State Farm’s operation as a mutual insurance company, which means it's owned by its policyholders rather than outside shareholders.
"State Farm Mutual is uniquely positioned to provide value directly to customers rather than shareholders," the company said.
The payouts are a result of last year's robust performance in its auto business.
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"This dividend is possible due to State Farm Mutual’s financial strength and a stronger than expected underwriting performance in 2025," the carrier said.
Who is eligible?
To qualify for a dividend payment, customers must have a private passenger auto policy that was active at any point between January 1, 2025, and December 31, 2025.
Customers do not have to be currently insured with State Farm Mutual.
Those who had multiple eligible policies will receive a separate payment for each, according to the company.
State Farm noted that policyholders whose dividend amount calculates below a $10 minimum threshold will not qualify to receive a payment.
Also, customers with policies that were provided through a state-assigned risk program are also not eligible.
What about auto rates?
The dividend does not affect auto rates in any way.
The company said that rates are handled separately, and, therefore, the strong underwriting performance last year can not be used to lower costs.
"Dividend payments are retrospective and do not affect future auto rates, which are based on expected future costs and monitoring trends to appropriately match price to risk," the company said, stressing, "The dividend will have no impact on future rates."
How will payments be made?
Payments are being made both digitally and by check.
Customers who already have an email address on file with State Farm will receive an email with instructions on how to log into a payment portal. They can then choose their method of payment.
Eligible customers who do not have an email address on file will automatically receive a check in the mail.
Getting notified
State Farm said it has already been reaching out to qualifying customers and advised those who believe they are eligible to keep an eye out for communication regarding the dividend payment.
For more information on the payouts, customers can visit sfdividend.com. They can also reach out to Dividend Customer Contact Center at 1-888-808-9532, or contact their State Farm Mutual agent.
State Farm said customers representing 49 million auto vehicle policies will benefit.
The payment distribution is expected to take several months to process.
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Consumer advocates raise concerns over California bill tied to insurance tracking technology
A proposal moving through the California Legislature could change how auto insurance companies calculate premiums. The measure, known as the Consumer Driving Data Protection Act of 2026, would allow insurers to make greater use of telematics data and predictive scoring models that track driving behavior.
This story was reported from Oakland, Calif.