A.M. Best, an insurance ratings company based in Oldwick, N.J., says that dividends are subtracted from a company's income, thus lowering the amount of taxes it must pay. The top five insurers paying the most policy dividends in 1999. Teachers Insurance and Annuity Assoc. A.M. Best Co. To receive a policy dividend, you must be a policyholder on the date your insurance company declares a dividend. So if you bought a policy from your insurer in August, and the insurer declared a dividend in June, you should not expect to get a check.
Most insurance companies pay dividends to policyholders just before their renewal dates comes up.
Whether dividends are a true incentive remains a question, because they can be quite small. If you are insured by a mutual insurance company, keep in mind that you may not receive dividends if you are insured by one of its stock subsidiaries. It's worth noting that not all mutual insurance companies pay dividends. Bob Sohovich, a spokesperson for Nationwide Mutual Fire Insurance Co., says his company instead will charge lower premiums if it nets favorable results. A.M. Best Co. The cash you receive on an auto or home insurance policy is proportionate to how much premium you have paid.