State Farm lowering auto rates and giving $100 per vehicle back to customers

Driving the news: State Farm policyholders on more than 49 million vehicles will receive the cash distribution this summer, State Farm CEO Jon Farney told reporters in a conference call.

• It amounts to a $5 billion cash-back dividend to auto insurance customers.
• The actual amount per vehicle will vary depending on the model, policy and location.
• "This is the largest dividend in our 103-year history," Farney said. "When State Farm does well, our customers do well."

Zoom in: The insurer has also reduced auto rates by an average of 10% in 40 states, driving $4.6 billion in savings for customers.

• "The short answer is we saw positive trends in auto collisions — lower repair costs when cars have accidents," CFO Chris Schell told reporters. "That's not just a State Farm phenomenon. That's across the entire industry, but it did drive meaningful improvement to our bottom-line underwriting results."
• Other insurers have also redistributed savings to customers. USAA announced in December that it had delivered about $3.8 billion "in financial rewards" to its members in 2025.

By the numbers: Auto insurance prices fell 6% nationwide to an average full-coverage premium of $2,144 in 2025, according to Insurify.

• The decline continued in January. Motor vehicle insurance prices fell by 0.4 points from December to January, according to the most recently released Consumer Price Index.

Yes, but: Homeowners' insurance prices have spiked amid growing costs associated with major climate disasters, such as the 2025 wildfires in southern California.

• About $5 billion of the nearly $15 billion State Farm paid in catastrophe losses in 2025 was to California wildfire victims — and the bill is still growing, Schell says.
• "The combined dynamics of increasing frequency and severity of storms — particularly severe convective storms — has pushed the rising cost to repair and rebuild, and the cost of reinsurance, up significantly, and so we've had to react to that," he says.