This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

State Farm is the world's largest mutual property and casualty company, which means its owned by its policy holders. In 2007, State Farm Mutual Automobile Insurance Company paid $1.25 billion in dividends to its mutual auto insurance policy holders. (In the interest of full disclosure, I did get one of those checks.)

The corporate headquarters are based in Bloomington, Illinois, where State Farm was founded in 1922 by George J. Mecherle. He thought farmers were being charged too much for car insurance because they don't drive as much as city folk and didn't incur as many loses. Well, the insurance companies available at the time didn't agree with him, so he started his own car insurance company for farmers.

Today, State Farm has grown into the largest insurer of cars and homes in the United States, as well as the leading insurer of watercraft. State Farm is also a leader in insuring Canadian cars and homes. State Farm serves a total of 77 million auto, fire, life, and health policies in the U.S. and Canada with 67,000 employees and 17,000 agents. About half of its employees are involved in claims processing in one of its more than 390 claims offices.

State Farm -- the biggest home insurer in the U.S. -- will avoid an endless string of court battles as they settle on 639 lawsuits over damages sustained during 2005's Hurricane Katrina. Insurance lawyers briefed by the company say that State Farm would, under a tentative agreement, provide an average of $125,000 to homeowners, with payouts ranging from a minuscule $2,000 to a whopping $2 million.

But this deal, for some reason, is only for residents of Mississippi (one state at a time, people), with the holdup centering on flood damage not covered under the claims. Flooding during Katrina was especially severe.

Before vilifying State Farm, however, keep in mind that damages totaling $5.2 billion have already been paid out in Mississippi and damages of $10.3 billion in Louisiana.

B. Brandon Barker is the author of Operation EMU