State Farm Mutual Automobile Insurance Co. policyholders will be receiving a payback from their insurer to the tune of $1 billion.

Policyholders in 49 states (with the exception of New Jersey), the District of Columbia, and the Canadian provinces of Alberta, New Brunswick, and Ontario, will receive a share of $1,005,500,000 in dividend payments from the Bloomington, Ill.-based insurer. The average dividend on each insured vehicle will be about $29.

Prior to this year's dividend, the highest dividend State Farm ever paid to policyholders was $892 million in 1998. Since 1991, State Farm has paid a total of $3.3 billion to policyholders in the form of seven annual dividends. The company did not pay out dividends in 1995, 1996, or 1999.

Dick Luedke, a spokesperson for the insurer, explains that State Farm — which is a mutual company owned by policyholders — only pays dividends when its financial results "are more favorable than we anticipated."

Luedke says the amount each policyholder will receive varies from state to state, but each policyholder receives 20 percent of the first $75 of his or her annual premium (or $15). After that, a policyholder may or may not receive a percentage of the remaining premium. The percentage ranges from zero to 20 percent, and varies according to State Farm's financial performance in that state, which is reflected by written premiums and claim payouts, among other factors.

Most policyholders will receive their dividend by check during the six-month policy renewal cycle, which began on June 12. About 2 percent of all policyholders will receive dividends of less than $10. Those policyholders will have the money credited to their insurance bill.

New Jersey policyholders are not eligible for this dividend because they are insured by a different company, State Farm Indemnity, which did not pay dividends to policyholders this year.