CALIFORNIA’S WORKERS’ compensation rate-making agency has recommended that average benchmark pure premium rates increase by 10.4% for policies incepting on or after Sept. 1, 2026.
In supporting its recommendation, the Workers’ Compensation Insurance Rating Bureau cited an increase in cumulative trauma claims and rising medical and administrative costs.
The filing, if approved by the California Department of Insurance, would be the second consecutive year that the benchmark rate insurers use to price their policies has increased.
Last year the DOI approved an 8.1% hike after WCIRB had recommended an 11.2% increase.
The pure premium rate increase has not resulted in employers with few or no workers’ compensation claims paying higher premiums since insurers only use the pure premium rate as a guidepost when pricing their policies. The pure premium rate remains at historical lows and the market is quite competitive.
The 10.4% recommended increase is an average across all the state’s workers’ compensation class codes, and each class will see a different change.
Here’s a look at the cost drivers.
Cumulative trauma claims
Cumulative trauma injuries develop over time through repetitive motions and can result in issues like carpal tunnel syndrome, tendonitis, worn rotator cuffs and knee problems. Additionally, three out of every five CT claims are filed after an employee is terminated, according to WCIRB. Nearly all CT claims are litigated.
Medical costs
According to WCIRB, average medical costs per claim increased 1.7% between 2021 and 2023, but excluding CT claims, that number rises to 3%.
Associated medical-legal costs are up 14% per claim in 2025, while medical equipment and other medical services costs jumped 7% in the same period.
Claims adjusting costs
The high litigation rates for CT claims are seeping into the cost of adjusting claims, according to WCIRB.
The takeaway
The Department of Insurance will hold a public hearing in the coming months, after which the insurance commissioner will either accept the recommendation or order a different rate.
Please note that your rates will depend on your claims history, industry and location, among other factors.
Also, the pure premium rate is an average acros all of California’s workers’ comp class codes and some may see higher or lower benchmark rates. Also, the market is still highly competitive.