State Farm starts issuing cash back dividends after doubling profit in 2025
State Farm has started issuing payments to qualifying auto customers as part of its one-time $5 billion cash back dividend, after the company ended 2025 with a net income of $12.9 billion, doubling its profit.
The insurance company’s net worth for 2025 was $170 billion, compared to $145 billion at the end of 2024.
State Farm auto insurance represented 63% of the property and casualty company’s combined net written premium, with earned premium at $71.3 billion.
The insurance company says in a press release that it is the largest cash-back dividend in the company’s 100-plus-year history. It previously said that the payments average $100 per vehicle.
Millions of customers have already received their individual dividend payments, and more are on the way, according to the release. It adds that the dividend is being distributed in waves to eligible customers across more than 49 million State Farm auto vehicles and will take several months.
Each consumer’s payment is based on a percentage of the premium paid for each qualifying policy in 2025. Percentages vary by state, ranging from 4% to 10%.
Customers will be notified of their pending payment by either email or letter.
“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,” said Jon Farney, State Farm president and CEO, in the release. “That translated this year to lower auto rates and cash back in the form of a $5 billion policyholder dividend.”
Dividend payments are retrospective and do not affect future auto rates, the release states. Future auto rates are based on expected future costs and trends.
Consumers can find out more by visiting here. For payment questions, customers can visit here or call the Dividend Customer Contact Center at 1-888-808-9532.
Downward-trending auto repair costs and collision frequency in 2025 have allowed State Farm to lower auto rates in 40 states in recent months. It says rates have been reduced by an average of 10%, with $4.6 billion in premium savings for consumers.
The insurance company has received national attention for a series of lawsuits in multiple states that claim it uses software to undervalue actual cash values.
Fender Bender and CRASH Network also reported on surveys last year showing shops have seen State Farm reducing labor rates.
Fender Bender reported that 57% of 230 survey respondents said State Farm had reduced its labor rates offered to their shop without explanation.
CRASH Network’s quarterly “Collision Industry Business Perspectives” survey taken last year found that 1 in 4 of 300 shop respondents said one insurance company is currently paying a lower labor rate than it previously was.
“State Farm was the most common insurer cited by survey respondents, and the labor rate decreases weren’t insignificant,” Yoswick said while sharing some of the survey findings with RDN previously.
“State Farm went from $60 per hour to $55 per hour, and we are not a DRP for them,” one shop wrote of the 8.3% drop.
Earlier this year, Michael Bradshaw, vice president of K&M Collision in Hickory, voiced concerns about State Farm during an open board meeting of the Society of Collision Repair Specialists (SCRS) and again during a meeting of the Collision Industry Conference (CIC).
He described how centralized internal review teams have been removing operations State Farm appraisers identified. He added that the operations are removed without discussion with the body shop or any proper documentation or explanation.
Changes to the estimate are completed by nameless individuals on the review team, he said.
“In fact, the names of those individuals are specifically excluded from the claim file for this purpose because they don’t want to be identified,” Bradshaw said.
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