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State Farm announced Thursday that it will pay the largest dividend in the company’s history to auto loan customers, who will be eligible for $5 billion in cash back.
State Farm Mutual Automobile Insurance Company, also known as State Farm Mutual, said it will make a one-time distribution to customers this summer on more than 49 million vehicles covered by State Farm Mutual auto policies.
The company dividend payments are expected to average $100 per vehicle and will vary based on the policyholder’s state of residence and the premiums he or she has paid.
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State Farm announced that its $5 billion dividend for auto insurance customers will be the largest ever. (Justin Sullivan/Getty Images)
“As a joint, customer-centric company, State Farm Mutual is able to deliver value directly to our customers while maintaining the financial strength to deliver on our promises going forward, which translated into lower auto rates this year and cash back in the form of a $5 billion dividend for policyholders,” said Jon Farney, president and CEO of State Farm Mutual.
State Farm’s announcement also noted that there is a downward trend in car repair costs The frequency of collisions by 2025 allowed the company to lower car rates in 40 states.
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Car repair costs have fallen recently, but have exceeded inflation over the past year. (Pia Bayer/photo alliance via Getty Images)
Auto insurance rate reductions average 10%, and State Farm Mutual noted that the total amount of premium savings for consumers totaled $4.6 billion.
The newest consumer price index (CPI) inflation. Data from the Bureau of Labor Statistics shows that auto insurance prices fell 0.4% between December and January.
Furthermore, the CPI data showed that car insurance prices were only 0.5% higher than a year ago.
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State Farm said a decrease in collisions has contributed to lower rates and the dividend. (Matteo Della Torre/NurPhoto)
That figure is well below the total CPI inflation figures, which rose by 2.4% year-on-year in January.
Auto repair costs rose a modest 0.2% month-over-month in January, though they were 5.7% higher last month than a year ago, BLS data showed.
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