Journal-News.com

Not only is the state's largest auto insurance company dropping its rates in Hamilton and surrounding areas, it's passing out free money, too.

State Farm Mutual Automobile Insurance Company — State Farm's auto division — is decreasing customer rates nationwide as a result of company performance and a drop in the number and severity of claims during the past three years.

Frequency and severity are proprietary numbers, and not available to the public, local agents said.

But, according to State Farm's Web site, the company experienced "better-than-expected auto results and a $4.1 billion reduction in catastrophe losses in 2006." State Farm also reported an after-tax income of $5.32 billion in 2006.

The average decrease across the state is about 8.8 percent, said Jay Nemeth, a Middletown-based agent for the past decade. In Hamilton and surrounding areas, the average drop is 8.6 percent.

The average premium in Butler County is about $600 per year, meaning customers will see savings around $52 annually starting Thursday on new and existing business.

Rates are subject to change each year, Nemeth said.

In addition, State Farm's Board of Directors has agreed to pay $1.25 billion in dividends to its auto insurance customers, which surpasses the $1 billion paid to the same customers in 2000.

Ohio will receive about $58 million of the $1.25 billion, while State Farm customers in Kentucky and Indiana will receive $19.6 million and $42 million, respectively.

Hamilton customers could see an average of $35 per policy dividend. Money will be awarded in check form or as an account credit during the next six months.

Contact this reporter at (513) 705-2840 or dgreber@coxohio.com.