California Workers' Comp Advisory Rates: 2025 and 2026

#California Advisory Pure Premium Rates, 2025–2026

The table below shows the average advisory pure premium rates for California workers' compensation insurance as approved by the Insurance Commissioner. These rates are a benchmark for policies that are new or renew on or after the effective dates shown. They apply on average across all employer industry classifications.

#What 'Advisory' Means for Insurance Rates

The adopted pure premium rates are advisory, not mandatory. California law allows insurance companies to set their own rates. Insurers can charge more or less than the advisory figure.

This means the rates approved by the Department of Insurance serve as a starting point. The actual premium a contractor pays depends on the rate their specific insurer files and other factors unique to their business.

#Factors Driving System Costs

The rate changes reflect shifts in the expected cost of benefits. For 2025, rising costs in the system were attributed to several factors. These included higher medical treatment and medical-legal costs.

An increased number of projected cumulative trauma claims and escalating claim adjustment costs also contributed to the 2025 increase. As an indicator of rising insurer costs, the Workers' Compensation Insurance Rating Bureau (WCIRB) projected a combined ratio of 123% for accident year 2024, the highest level in nearly 15 years.

While costs have risen, wage increases from a growing economy have provided a partial offset to some of the higher expenses within the workers' compensation system.

#The 2026 Rate Decision

Effective for policies starting September 1, 2026, the approved average advisory pure premium rate is $1.65 per $100 of employer payroll. This represents a 6.6% increase from the approved 2025 rate.

This adopted rate is lower than what the WCIRB initially proposed. The bureau, which collects and analyzes workers' compensation data, had requested a 10.4% rate increase for 2026.

#The 2025 Rate for Comparison

To provide context for the 2026 change, the rate for the prior year also saw a significant increase. The rate that became effective on September 1, 2025, was $1.52 per $100 of payroll.

That 2025 rate was an 8.7% increase over the previous year's approved rate. Both the 2025 and 2026 decisions show a trend of rising advisory rates based on projected costs in the system.

#How Deductibles Affect Premiums

While an employer cannot change the advisory pure premium rate, they can influence their final premium cost in other ways. One option involves the policy's deductible.

A deductible is the portion of a claim that an employer agrees to self-insure. Choosing a policy with a higher deductible generally results in a lower insurance premium. This transfers some of the initial financial risk of a claim from the insurer to the employer.