Christmas is coming early for State Farm auto insurance customers.

The nation’s largest auto insurer recently announced it’s issuing $5 billion in dividend payments to its customers - the largest such payout in company history. Drivers will receive 4 percent to 10 percent of the premiums they paid in 2025.

“That translated this year to lower auto rates and cash back in the form of a $5 billion policyholder dividend,” CEO Jon Farney said.

Drivers of more than 49 million vehicles are slated for payments. Several million have already received their money, the company said, and remaining dividends will be sent out in the next few months.

State Farm is notifying drivers eligible for a share of the $5 billion payout by email or letter.

Customers who had State Farm policies in 2025 but no longer have policies may be eligible for payouts, the company said.

State Farm is a mutual insurance company, which means policyholders have the chance to share in the company’s yearly profits through dividends.

Customers who had State Farm policies in 2025 but no longer have policies may be eligible for payouts, the company said.

State Farm is a mutual insurance company, which means policyholders have the chance to share in the company’s yearly profits through dividends.

This year’s dividend is the first such payout for auto insurance customers since 2021, when 2020 policyholders received $1.9 billion according to State Farm records.

Mutual insurance competitor USAA issued at least $3.8 billion in dividends for 2025 - the largest in company history.

The record-breaking payouts are due to, in part, a combination of fewer claims and changing rates, according to an August analysis by insurance marketplace Insurify. Average auto insurance rates hit record highs in 2024 after three consecutive years of annual increases.

“Those high premiums helped car insurance companies recover financially and enter 2025 in a more stable position,” Insurify said.

Some 39 states saw their average auto insurance rates fall in 2025.

The consumer-friendly rate environment may come to an end in 2026, though. Insurify predicted rates will rise around 1 percent in 2026, with 32 states “on track” to have higher average rates this year.

Some 11 states have seen auto insurance premiums fall in 2026, August data from insurance marketplace The Zebra notes. Most states’ insurance rates experienced minor increases of under $100.

Louisiana has the highest rates in the nation, while Vermont, Wyoming and North Carolina have the lowest rates, The Zebra found.

“There have been lots of state-by-state decreases for carriers this year,” The Zebra CCO David Seider said. “I expect to see some states have meaningful premium drops on a per-carrier basis.