State Farm to pay out $15.9 million in Md. Policyholders to get dividend in November


September 11, 1997|By Mark Guidera | Mark Guidera,SUN STAFF

State Farm Mutual Automobile Insurance Co., the nation's largest auto insurer, said yesterday that it will pay Maryland policyholders $15.9 million in dividends, beginning Nov. 1.

The payments are part of a $692.3 million nationwide dividend distribution program announced yesterday by the Bloomington, Ill.-based insurer.

Policyholders in 30 states and the District of Columbia will benefit.

M. Richard Adams, a spokesman for State Farm's Seaboard Regional Office in Frederick, said the program is the result of "the frequency and costs of claims being lower than anticipated" during the past six months.

In Maryland, 655,300 policyholders will receive payments averaging $24 each, said Adams.

Most auto insurance policyholders will get a check for their dividend.

Those receiving dividends of $10 or less will see the dividend in the form of a reduction on insurance premium bills sent out after Nov. 1, said Adams.

State Farm last paid a dividend to Maryland policyholders in 1994, as part of a nationwide distribution of $187.5 million.

Dividends are one-time returns of premium payments to insurance policyholders.

They are paid when a mutual insurance company pays out less than it anticipated in claims.

Adams said insurance rates for Maryland policyholders also are about to change.

State Farm's rates will drop 1.6 percent, except for drivers with poor driving records, who may see increases.

Insurance companies adjust rates when long-term trends indicate an adjustment is needed, said Adams, the spokesman.

Pub Date: 9/11/97

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