State Farm announced Thursday it's returning up to $2 billion to its auto customers who are driving less because of the coronavirus pandemic.
The Bloomington-based company is the latest insurer to announce payments or refunds to customers. Allstate, Liberty Mutual, and American Family have made similar moves.
Less driving means fewer car crashes. Fewer car crashes means big savings for auto insurers.
“State Farm is returning value through a dividend to our customers,” Chairman, President and CEO Michael L. Tipsord said in a statement. “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."
Announcing the Good Neighbor Relief Program! Our customers with auto policies in force between March 20 and May 31 will receive on average a 25% policy credit (no policyholder action needed). Learn more: https://t.co/OUUrmf1AKU pic.twitter.com/KI5OnPX15W
— State Farm (@StateFarm) April 9, 2020
State Farm says customers do not need to take any action to receive their dividend that will appear as a credit on their auto policy.
Customers can expect to receive a credit of about 25% of premium for the time period March 20 through May 31. Customers will receive credits applied against bills beginning as early as June.
"We’ll continue to monitor our loss experience and respond appropriately," the company said.
The up to $2 billion amount is the single largest dividend paid to customers in State Farm history. State Farm is the largest auto insurer in the U.S.
Country Financial, a smaller insurer also based in Bloomington, has not responded to a WGLT request for comment on its plans.
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