happydawg asked in Business & FinanceInsurance · 1 decade ago

State farm just sent me a check for $63.50. Whats this about?

They say its a dividend check for a policy. Why did they send me this money. Is this a scam or should I just put it into savings somewhere...maybe an I bond or something?

I just cannot figure out why State farm is sending their customers money, first a free pizza and now a check.

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  • 1 decade ago
    Best Answer

    Not a scam. If you don't want to bother to ask your agent to explain "dividend", then just deposit the check and don't worry about it.

    Source(s): agent, 21+ years
  • j-man
    Lv 4
    1 decade ago

    Many insurance companies are 'Mutual' insurance companies. That means they are owned by the policyholders and not by investors. State Farm has many mutual insurnace companies under their banner.

    Every mutual insurance company expects to make a certain amount of profit every year, which gets re-invested in the company. If their profit is higher than expected, they will share the profits with their policyholders. Hence your check in the mail.

    I have gotten a few such checks over the years. They are rare, but nice to receive.

    And as far as taxation goes, that is tax-free. The IRS considers this to be a refund of premiums and not taxable dividends.

    Source(s): 5 years selling insurance
  • 1 decade ago

    When you have a policy with an insurance company, occasionally the premium you pay will go down and they will refund you by check. Do whatever you want with the money.

  • 1 decade ago

    Be weary. Call your agent. Last year we received a check from Farmer's Insurance. I assumed I overpayed and cashed it. Come to find out, and underwriter had decided to reduce our home owners coverage for $135,000 (appraisal value) to $108,000! Needless to say I was surprised to find out I was only covered for $108K for the entire year-not even enought to pay of my loan if my house burned down! Call your agent immediately - good luck.

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  • Anonymous
    1 decade ago

    Just deposit the check. Based on your description, it sounds legit. Like they said, it's a dividend check.

  • 1 decade ago

    Clearly, they are celebrating on a grand scale for not having to pay the victims of their poor policies and illegal practices in the Katrina zone.

  • 1 decade ago

    Call your agent and ask.They should know the answer.

  • Anonymous
    1 decade ago

    No,its just that they had better profits than expected,wasn't that cool??!!

    Source(s): READ the paperwork that came atattched to your check,it says it right there!
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