The State Farm Mutual Automobile Insurance Company has announced that it will apply up to a 25% credit to customers’ bills because there are fewer cars on the road as people drive less during the pandemic. Those fewer cars mean fewer accidents, which means fewer payouts—and thus fewer costs to the company. Instead of pocketing those savings for themselves, however, State Farm will instead return them to customers. Here’s what you need to know:
- The credit is part of State Farm’s Good Neighbor Relief Program, which aims to support its customers during the pandemic.
- In total, State Farm will return $2 billion worth of dividends to customers.
- These dividends will come in the form of a credit against a future statement/bill.
- The average dividend (i.e., credit) will amount to about 25% of the premium the customer paid for their policy for the March 20 to May 31 period. The exact percentage of the credit will vary by state.
- The dividends will begin being applied as statement credits beginning with June bills.
Announcing the $2 billion in credits, State Farm CEO Michael L. Tipsord said, “State Farm is returning value through a dividend to our customers. We insure more cars than anyone, and we see from our claims activity people are driving less. This dividend is one of the ways we’re working to help our customers during this unprecedented situation.”
There is no action State Farm customers need to take to get the credit as it will be applied automatically to future bills. However, State Farm says customers should reach out to their agent should they need help with payment options during the pandemic.