State Farm has requested a 10.6% reduction in homeowner’s insurance rates, a request that would result in significant savings for 1.2 million Californians, the California Department of Insurance recently announced. If approved, policyholders would save an average of $103 annually, amounting to $123 million in total savings across the state.

Earlier this year, Insurance Commissioner John Garamendi released a study called “Lower Claims, Higher Profits: Where Do Your Premium Dollars Go?” The results of the study revealed that many of California’s largest insurance companies pay less than 50 cents of each premium dollar to settle policyholder claims. In response to the study, Garamendi ordered several insurance companies, including State Farm, to justify their rates. State Farm’s request for lower rates must be reviewed and approved by the Department of Insurance.