State Farm to offer $100 average refund to car insurance customers
State Farm is issuing an average refund of $100 per vehicle to its auto insurance customers in what the company says is the largest dividend in its history.
The insurer said Thursday that the refunds will go out to policyholders of 49 million vehicles this summer. The exact payment amount will vary based on where a customer lives and their individual premiums. All told, the refunds will amount to $5 billion total in cash flowing back into customers' wallets, State Farm said in a statement.
It is unclear what form the refunds will take, although the Bloomington, Illinois-based company told CBS News that the cash distribution "will not be issued as a credit." A spokesperson said more details on refunds will be shared in the coming months.
State Farm cited "stronger than expected underwriting performance" and shrinking auto repair costs as factors that enabled it to issue the coverage refunds.
State Farm provides insurance for autos, homes and small businesses and has nearly 97 million policyholders.
Other insurance companies have also recently moved to cut their coverage rates and reimburse customers. USAA, which provides insurance to members of the military and their families, said in January that it delivered a total of $3.8 billion in savings to customers last year.