State Farm has announced a $5 billion cash back dividend to its auto insurance customers, marking the largest such payout in the company’s history. Lisa Stewart, Senior Vice President at State Farm Mutual Automobile Insurance Company, explained that as a mutual company, State Farm is able to return value to its customers rather than shareholders when financial results exceed expectations.
“This cash back to auto customers is not the same thing as a rate reduction. It is a way to share value when results are better than expected, among other factors. It is not a guarantee of what next year will look like. We think that distinction matters, and New Yorkers deserve that clarity,” said Stewart.
For New York policyholders, this dividend amounts to about 4% of their premium, while in some other states it reached up to 10%. The variation reflects differences in claims experiences and risk costs across states. While State Farm has reduced auto rates in more than 40 states—saving those customers over $4.6 billion annually—New York was not included due to unique cost pressures keeping premiums higher than average.
Stewart pointed out that factors such as vehicle repairs, litigation expenses, inflation, fraud, and abuse contribute significantly to rising claim costs. She emphasized the importance of insurers remaining financially strong so they can fulfill their obligations even during years with high losses.
“We support Governor Hochul’s plan to fight fraud and lower costs,” Stewart stated. In her 2026 State of the State address, Governor Kathy Hochul noted that average annual auto insurance premiums in New York stand at about $4,000—approximately $1,500 higher than the national average—and highlighted staged accidents and fraud as key drivers of these elevated costs. According to Stewart, nearly 44,000 incidents of suspected motor vehicle fraud were reported by New York insurers in 2025 alone—an increase of 80% since 2020.
Stewart also voiced support for several proposals from state policymakers aimed at reducing fraud-related expenses:
“That is why we appreciate key parts of the Governor’s package aimed at:
Cracking down on staged accidents and organized fraud, including stronger tools for prosecutors to pursue the people who organize these schemes. The recently introduced FRAUD Act, sponsored by Assembly Insurance Committee Chair David Weprin, would make staging a motor vehicle collision a Class E felony and allow restitution to insurers. That is the kind of specific, enforceable measure that can change the risk calculus for fraud rings that view New York as fertile ground.
Giving insurers more time to investigate suspected fraud, so legitimate claims can be paid faster while suspicious claims get the careful review they deserve. Current law caps the investigation window at just 30 days, which handcuffs the ability to identify and stop fraudulent activity.
Strengthening the state’s focus on fraud enforcement, including added resources and coordination with law enforcement and district attorneys across the state.
Reforming the serious injury threshold under New York’s no-fault system with objective medical standards. The current definition is vague and applied inconsistently, which allows minor and temporary injuries to become the basis for costly litigation. Twenty-eight other states have already addressed this. New York should join them.”
Stewart further stressed that addressing these issues requires collaboration among companies, lawmakers, government offices—and consumers themselves: “Every accident avoided is a claim that does not get filed… Report suspected fraud… They help customers find discounts, adjust coverage…” She concluded by affirming State Farm’s commitment: “We support common-sense reforms that reduce fraud, encourage safer behavior… New Yorkers deserve affordable coverage.”
