California Workers Comp Rates 2020 are going to be declining for the fifth straight year. The average of the Jan. 1, 2020, advisory pure premium rates are $1.58 per $100 of payroll. If adopted, this would be the ninth consecutive pure premium rate decrease since 2015 totaling roughly 45 percent. This year the amount of decrease amounts to 5.7% average decrease compared to 2019 workers comp rates.
What is contributing to the declines for California Workers Comp Rates 2020
California Workers Comp Rates 2020 are declining for a number of reasons. The strongest contributing factors include: continued downward development in losses, accelerated claim settlements, sharply declining pharmaceutical costs, and a decline in the number of liens being filed. Each of these factors lower the amount insurance carriers pay out in claims each year. Because of these positive developments, the insurance carriers are able to pass on some of these cost savings on to their customers in the form of lower rates for workers compensation.
What is limiting the declines for Workers Compensation Rates?
Even though workers compensation rates have declined steadily for five years in the state of California, the business community within the state still pays more for premium then any other state in the country. There are still a few things contributing to keeping work comp rates high for the state of California. Factors contributing to continued high rates include cumulative increases in claim severities and continued high levels of allocated loss adjustment expenses from trauma claims. These issues are worth monitoring for the foreseeable future.
What Can California Businesses do to limit Premium Rate?
Partner with an independent Agent
Partnering with an Independent Insurance Agent is the best way to make sure you are getting the best coverage at the most competitive rates. If you have time, you can shop around and get quotes from multiple carriers. If you do not have time, you can partner with an independent insurance agent and let them do the shopping for you. This is because an independent agent can shop your policy out to multiple carriers and make those carriers compete for your business. When you have multiple carriers competing for your business the independent agent can get your business better coverage at better rates.
In order to maximize savings, it is important to shop around your policy from time to time. Now it is not the best idea to switch carriers each year because of a small decrease in premium. Long term relationships do matter when your business experiences a loss. At the same time, it is your responsibility as a business owner to make sure your insurance carrier is competitive with the market.
A Safety Program can help limit the cost of workers compensation insurance in California because it will limit both the frequency and severity of claims. When you business has less claims and the claims you do have are small, the insurance carrier is more likely to offer your business a favorable rate for premium.