State Farm Mutual Automobile Insurance Co. will pay dividends of just over $1 billion to auto insurance policyholders in 49 states, the District of Columbia and three Canadian provinces.
The return of premiums, approved yesterday by the State Farm Mutual board of directors, betters the previous high of $892 million announced in June in 1998. With this dividend, State Farm will have returned more than $3.3 billion to policyholders in seven dividends since 1991.
Dividends are a one-time return of premium based on recent financial results. State Farm doesn’t plan dividends when setting prices, but does return money to customers when financial results are better than anticipated and business conditions permit.
“As a mutual company, State Farm’s primary obligation is to its policyholders,” said Vincent J. Trosino, president and chief operating officer.
The size of each customer’s dividend will vary from state to state, but the average per insured vehicle will be about $29. The vast majority of policyholders will receive their dividend by check during the six-month policy renewal cycle beginning today. The dividend for the 2 percent of households receiving less than $10 will be credited to their State Farm account.
State Farm’s New Jersey policyholders are not included in this dividend because they are insured by a different company, State Farm Indemnity. New Jersey policyholders received a return of premium in 1997 and 1998 and a 16 percent rate reduction in March 1999. In Canada, State Farm Mutual markets auto insurance in only three provinces, Alberta, Ontario and New Brunswick, where a dividend is being paid. Texas dividends are subject to approval by the state Department of Insurance. Canadian policyholders will receive their dividend payments in Canadian dollars.
The states and provinces, number of vehicles insured by State Farm, the estimated total dollar amount that will be returned, and the average amount per vehicle:
State
Vehicles
Insured Amount
Amt./Vehicle
Alabama
721,895
$39,600,000
$55
Alaska
101,015
1,500,000
15
Alberta
59,119
1,300,000
22
Arizona
532,238
7,900,000
15
Arkansas
445,425
6,700,000
15
California
2,818,085
182,600,000
65
Colorado
776,735
11,600,000
15
Connecticut
43,340
3,600,000
82
Delaware
127,332
9,500,000
75
Dist. of Col.
40,694
3,300,000
80
Florida
2,212,371
100,300,000
45
Georgia
1,369,404
28,100,000
21
Hawaii
115,704
8,700,000
75
Idaho
172,538
2,500,000
15
Illinois
2,312,647
34,300,000
15
Indiana
957,658
14,200,000
15
Iowa
452,898
6,600,000
15
Kansas
460,572
22,100,000
48
Kentucky
516,174
12,700,000
25
Louisiana
894,154
31,500,000
35
Maine
114,242
1,700,000
15
Maryland
686,712
45,800,000
67
Mass.
13,831
600,000
46
Michigan
1,252,614
18,500,000
15
Minnesota
916,576
13,400,000
15
Mississippi
431,919
6,500,000
15
Missouri
929,721
13,800,000
15
Montana
170,480
2,500,000
15
Nebraska
347,205
5,000,000
15
Nevada
202,503
3,000,000
15
New Brunswick
26,119
600,000
22
New Hamp.
99,120
5,800,000
59
New Mexico
257,642
16,400,000
64
New York
1,103,424
16,500,000
15
North Car.
884,077
13,200,000
15
North Dakota
87,176
3,700,000
42
Ohio
1,567,247
46,100,000
29
Oklahoma
510,076
7,500,000
15
Ontario
639,119
13,700,000
22
Oregon
567,058
9,400,000
17
Penn.
1,563,857
23,300,000
15
Rhode Island
5,065
300,000
64
South Car.
801,789
19,200,000
24
South Dakota
110,706
1,600,000
15
Tennessee
887,311
13,300,000
15
Texas
2,870,454
88,000,000
31
Utah
296,848
13,700,000
46
Vermont
42,199
600,000
15
Virginia
958,040
14,300,000
15
Washington
621,644
37,600,000
60
West Virginia
393,761
5,900,000
15
Wisconsin
492,471
13,500,000
27
Wyoming
116,730
1,900,000
16
Total Return: $1,005,500,000
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