Car insurance rates have been soaring since the pandemic. But now, some drivers insured by State Farm are receiving dividend payments, a share of the company’s profits, tied to those higher premiums. The news comes as loyalty in the insurance industry declines in response to those surging rates.
In 2025, the number of customers who re-shopped car insurance hit a record high of 57%, according to a J.D. Power analysis. More concerning for insurance providers is that rates of switching rose even among customers thought to be the most likely to stay put: those who bundle multiple policies with one insurer.
With customers more willing to jump ship for a better deal, insurance companies are finding ways to lower rates, offer discounts and, in State Farm's case, hand out cash to existing customers. State Farm began distributing its record $5 billion dividend on July 31, with millions of payments already mailed. Here's what to know about who qualifies, how much you could receive and when your payment could arrive.
State Farm dividend checks are going out to millions of customers
In February, State Farm announced $5 billion total in cash back payments to car insurance policyholders, the largest dividend payout to customers in the company's history. State Farm began distributing the payments on July 31, and more than 7.2 million checks had been mailed as of August 18, according to CBS News.
Another 3.8 million checks were expected to go out this week. The exact dollar amount each eligible customer will get will vary, but State Farm says the average payment will be $100 per vehicle.
The major insurance provider is in a good position to offer these payouts. Consistently ranking as one of the most popular car insurance companies, State Farm reported an underwriting gain in 2025 of $1.5 billion, after reporting losses three years in a row prior to last year.
The gain came despite losses in its home insurance segment and was driven almost entirely by growth in car insurance policies.
Alongside dividend payments going out to customers, the company also announced lower premiums. The rate cuts announced will result in $4.6 billion in savings nationwide, with each eligible customer seeing an average of 10% lower premiums.
Still, it's always worth shopping for car insurance ahead of each renewal to make sure you're getting the best deal available for the coverage you need.
Even with a 10% rate cut at State Farm, you still might find better rates elsewhere, especially as insurers compete on price in a market in which customers are more willing than ever to switch. Even if you don't find a better deal, there's no harm done by shopping around.
In the worst-case scenario, taking a few minutes to compare quotes before renewing will confirm you're getting the best price for your car insurance.
Who is eligible for a dividend payment from State Farm?
According to the statement released by State Farm, 49 million insured vehicles qualify for the one-time payouts. State Farm customers with an auto insurance policy in force between Jan. 1 and Dec. 31, 2025, are eligible for a dividend payment. As mentioned, the average payout will be $100 per car, but the exact amount you get depends on the state you're in and the amount you paid in premiums.
In Oklahoma, for example, eligible customers are those who had an active private passenger auto policy as of December 31, 2025. The dividend payment those customers will receive will amount to 10% of the premiums paid during a predetermined period, for an average of about $112 per car.
Nationwide, the percentage used to calculate payments varies by state, ranging from 4% to 10%, according to CBS News.
Customers who have an email address on file with State Farm will receive an email with instructions for accessing a payment portal, where they can choose to receive their money through Zelle, Venmo or PayPal or by mail as a check. Customers without an email address on file will automatically receive a check by mail.
Because of the scale of the distribution, State Farm says it will take several months for all payments to go out. Customers who haven't received their dividend yet can visit State Farm's dividend website or contact the insurer for more information.
