California drivers to get $100 average refund from State Farm: What to know

PREVIOUS COVERAGE: California approves 17% rate hike for State Farm

California homeowners and renters with State Farm are just days away from a double-digit rate increase

LOS ANGELES - Good news if you have an auto insurance policy with State Farm Mutual! 

State Farm, the dominant auto insurer for California’s millions of drivers, announced on Thursday a record-breaking $5 billion dividend payout. 

Following a massive financial recovery in 2025, the company will begin returning cash directly to its policyholders this summer.

What we know:

The $5 billion giveback serves as a financial "thank you" to customers after the company successfully pivoted from a multi-billion dollar loss in 2024 to a massive $12.9 billion profit in 2025.

The dividend will be distributed this summer to "qualifying customers" across more than 49 million vehicles nationwide. 

For California—where State Farm serves nearly 8 million policies and accounts—the impact will be felt most significantly. 

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The company reported that the average payout will be approximately $100 per vehicle, though the exact amount will vary based on individual premiums paid. 

What they're saying:

"As a mutual company with a customer-first focus, State Farm Mutual is able to provide value directly to our customers while maintaining financial strength," said State Farm CEO Jon Farney. 

The announcement comes just months after State Farm filed for a 6.2% rate reduction specifically for California drivers, which is slated to take effect in early 2026. 

While homeowners' insurance remains a "challenging" landscape due to Southern California wildfire losses totaling nearly $7 billion, executives noted that the auto side of the business has seen "meaningful improvement."

Timeline:

• January 2025: Devastating Southern California wildfires result in 13,000 claims and billions in property losses for State Farm.
• May 2025: California regulators approve a 17% emergency interim rate increase for State Farm's homeowners line to ensure solvency.
• November 2025: State Farm files for a 6.2% auto rate reduction in California, citing lower physical damage claims.
• February 26, 2026: State Farm reports record $12.9 billion net income and declares the $5 billion auto dividend.
• Summer 2026: One-time dividend distributions begin for California auto policyholders.

What's next:

Eligible California customers can expect to see their dividend as either a credit toward their next premium or a direct payment starting this summer. 

California policyholders do not need to apply for the refund; qualifying customers will see the distribution automatically.