California Insurance Commissioner Steve Poizner approved a nearly 18 percent homeowners rate reduction at Fireman's Fun Insurance Tuesday.
The move is expected to save homeowners an average of $505 per year.
Commissioner Poizner said that he is trying to encourage competition.
"When homeowners insurance companies and auto insurance companies know that you're shopping around they'll focus on efficiency, they'll focus on cost of savings," Poizner said. "[There is] Nothing like healthy competition; that's one of my goals as insurance commissioner - to make sure consumers have lots of choices."
The rate change comes after a challenge to the company's rates by the group Consumer Watchdog. The group launched the rollback effort by using a provision of Proposition 103 that forbids excessive rates.