State Farm Returning $400M to California Auto Customers
State Farm is returning $400 million to California mutual auto insurance customers due to better than anticipated claim results, the company reported.
The announcement comes as the California Insurance Commissioner Ricardo Lara earlier in mid-March said insurers in California continued to overcharge drivers despite reduced risk of accidents during the pandemic.
The State Farm dividend applies to roughly 3.5 million private passenger auto policies in California. Through the dividend, customers can expect to receive a check of 18% of premium, or averaging about $100 per policy, for the time period from June 1 to Dec. 31, 2020.
“State Farm is once again returning value to our California customers while remaining financially strong to keep our promises now and in the future,” Tom Conley, senior vice president of State Farm said in a statement. “This additional dividend is another way we’re making adjustments based on driving behaviors to minimize impacts and help our customers.”
State Farm announced last year that the Good Neighbor Relief Program, which included a dividend for the period of March 20, 2020 to May 31, 2020 as well as auto rate cuts in every state, provided $4.2 billion in savings for State Farm customers. California State Farm auto customers received an average 27.5% dividend and 6.5% auto rate reduction, according to the carrier.
Customers do not need to take any action to receive this dividend, which will be mailed in the form of a check as early as May.