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State Farm Lowers California Auto Rates

4 August 2000

    ROHNERT PARK, Calif. - For the sixth time since 1995, State Farm Mutual 
Automobile Insurance Company will reduce the cost of auto insurance for its 
California policyholders. Rates will drop an average of 5.0 percent effective 
Sept. 15, saving the company's customers in the state about $98.8 million.

    With this rate reduction, State Farm's California rates have dropped 25.7
percent since 1995. In addition, the state's leading insurer of passenger cars
recently announced it will return $182.6 million in dividends to its
California policyholders this year. This means State Farm will have returned
$447.9 million in dividends to its California customers since 1997.

    "We're glad we can continue to share with our policyholders the results of
their good driving and our ongoing efforts to better manage our administrative
costs," said Greg Jones, vice president -- California for State Farm.

    "At the same time, we remain committed to providing the superior customer
service that has made us the insurer of choice for more California passenger
car drivers than any other," Jones said, "Our performance is reflected by our
excellent showing in the state Department of Insurance consumer complaint
rankings."

    Policyholders who have the collision and comprehensive coverages will
receive premium reductions. Comprehensive coverage pays for losses such as
those from theft, vandalism, fire, storm damage and glass breakage.

    State Farm, also the largest auto insurer in the United States, insures
nearly 3 million cars in California.

    Year            Rate Reduction

    1995            -1.7%
    1996            -5.4%
    1997            -5.3%
    1998            -8.4%
    1999            -3.0%
    2000            -5.0%
    Cumulative      -25.7%

    Year            Dividend (in millions)
    1997            $93.3
    1998            $172
    2000            $182.6
    Totals          $447.9