Consumer Watchdog filed a petition in California challenging State Farm’s proposed rates for its homeowners insurance and wants the insurers to cut its rates by as much as 40 percent.

The Santa Monica, Calif.-based consumer group said insurer will be overcharging more than 280,000 homeowners policyholders in the state unless it cuts its rate by as much as 40 percent, or nearly $100 million.

According to Consumer Watchdog, State Farm overestimated claims costs and improperly sought exceptions to the rule against excessive rates, resulting in an excessive rate proposal.

Consumer Watchdog is citing Proposition 103 in its argument.

Prop. 103 is California’s prior approval law that bars excessive home, auto and business insurance rates and requires insurance companies to justify their rates through a public application process.

State Farm filed for an overall rate decrease of 26%, but the insurance company’s own data shows that an overall rate decrease of at least 40 percent is warranted, Consumer Watchdog’s petition alleges.

A query seeking comment from State Farm was not immediately returned.