Shop one application across many private insurers. Arizona has no state fund, so every insurer sets its own price off the same base and the same payroll can quote thousands of dollars apart. First fix your job categories, confirm who is on the policy, and if you are in the plan of last resort, make leaving it the first goal. Who this is for: Arizona contractors who want a lower price without cutting required coverage.
The short version
- Arizona has no state fund. You buy from private insurers, and they compete on price.
- Rates fell 6.7% on January 1, 2026, the twelfth straight annual decrease, and a nearly flat 2027 is proposed.
- Fix your job categories and who is on the policy first. Office staff and owners of 50% or more are the two most common errors.
- The state's plan of last resort adds a surcharge of up to 25%, and it is meant only for employers no private insurer will take.
- Shop every one to three years, starting 60 to 90 days before renewal, with your claims history in hand.
Where do Arizona contractors buy workers comp, and why does it matter for price?
This is a fully private, competitive market. The old State Compensation Fund was privatized in 2013 and became CopperPoint, now an ordinary private insurer with no state role. You buy from any insurer licensed here, or, if none will take you, from the assigned risk plan, the state's plan of last resort. Rates fell 6.7% on January 1, 2026, so if your renewal did not move, ask what offset it.
| Where you buy | How the price is set | What it means for you |
|---|---|---|
| A private insurer | NCCI, the national rating bureau, files base rates each year, the state reviews them, and each insurer may file its own approved discount. | The same payroll prices very differently from one insurer to the next. Shopping works. |
| The plan of last resort | NCCI's filed rates, plus an approved across the board increase, plus a loss based surcharge capped at 25% | You pay more for the same coverage. Not every policy carries the full surcharge, so ask for your breakdown. |
What should I fix before I shop in Arizona?
Insurers price the facts you give them, so wrong facts mean a high price everywhere.
- Job categories. The office category is all-or-nothing under the NCCI rules this state uses. An office manager doing 100% desk work in a separated office belongs there. An estimator who visits sites does not.
- Owner coverage. An owner of 50% or more of an LLC or corporation here is outside comp unless the insurer adds them back. An owner under 50% is covered automatically unless they file a signed rejection. Sole proprietors and partners are out unless added.
- Payroll estimate. Too high and you overpay all year; too low and the premium audit (the insurer's year end check of your real payroll) bills the difference at once.
- Subcontractor certificates. A contractor who supervises an uninsured sub stands in as that sub's employer here, and the insurer charges premium on that payroll at audit. If it happens, check two things: the sub's payroll belongs in the sub's own trade category, not yours, and where you cannot show what the sub paid, the insurer charges a percentage of the contract price, which is usually higher. The sub's records cut the bill.
- Claims history. Get the report and write a short note on each claim. A closed claim with a fix in place prices better than a mystery.
For the full list of levers, see how to reduce workers comp costs in Arizona.
How do I get out of the plan of last resort?
You only belong there if two unaffiliated insurers declined you, one of them your current insurer. Many contractors land in it after a lapse, a new business start, or one bad year, then stay for years out of habit.
Getting out is mostly time and paperwork. NCCI runs every application past private insurers first through its VCAP program, so a clean application can be picked up before it is ever assigned. After one or two clean years most contractors move to a private insurer at renewal. Ask your agent to submit you again rather than letting the plan renew by default. See how to get workers comp in Arizona, even if turned down.
What can I expect to save in Arizona?
The figures below are illustrative national ranges, because no state class rate table is published here. Your result depends on your trade, payroll, claims history, and insurer.
| Move | Illustrative savings (national) |
|---|---|
| Shop one application to many insurers | Often 10% to 30% when not shopped in three years |
| Move a qualifying office employee to the office category | Roughly $2,000 to $5,000 a year per $50,000 of payroll in a field trade |
| Correct owner coverage under the 50% rule | Thousands a year for a working owner in a field class |
| Leave the plan of last resort | Up to the 25% surcharge, plus a lower base at a competitive insurer |
| Collect sub certificates | Avoids sub payroll charged to you at audit |
Shop every one to three years, starting 60 to 90 days before renewal. See the national guide to cheaper workers comp and business insurance in Arizona.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A landscaping and hardscape contractor in Tucson with 9 employees has been in the plan of last resort for three years after a lapse. He pays roughly $31,000 a year, including the surcharge, and has had one small claim in that time.
What went wrong: He assumes the plan is his only option. His office scheduler is rated as a landscaper, and his 50% co-owner, who works only in the office, sits on the policy at field payroll.
What it cost: Illustrative numbers: with a clean two year record, a broker finds a private insurer willing to quote. Removing the surcharge and moving to a competitive rate saves about $7,400. Moving the scheduler to the office category saves about $2,300. Taking the office co-owner off saves about $3,900.
The fix: The plan is a starting point, not a home. Ask a broker to test the private market every renewal once you have a clean year.
Frequently asked questions
Q: How can I find cheaper workers comp insurance in Arizona?
Fix your job categories and owner coverage, collect subcontractor certificates, then have one application shopped across many private insurers. If you are in the plan of last resort, leaving it comes first.
Q: Does Arizona have a state fund for workers comp?
No. The State Compensation Fund was privatized in 2013 and is now CopperPoint, an ordinary private mutual insurer. The backstop here is an assigned risk plan run by NCCI.
Q: I was told nobody else will insure me. How much extra am I paying?
You are most likely in the assigned risk plan, the state's plan of last resort. It prices at NCCI's filed rates, plus an across the board increase, plus a loss based surcharge capped at 25%. Ask your agent for the breakdown, because not every policy carries the full surcharge.
Q: Did Arizona workers comp rates go down in 2026?
Yes. Rates fell 6.7% in the voluntary market and 6.6% in the assigned risk market on January 1, 2026, the twelfth straight annual decrease. A nearly flat 0.2% decrease is proposed for 2027, pending state review.
Q: How often should I shop workers comp in Arizona?
Every one to three years, starting 60 to 90 days before renewal. Shop sooner if your price rose without claims or you have had a clean year in the plan.
Q: What do I need to hand a broker to get real quotes?
Your current policy, five years of claims history, a payroll list showing what each person actually does, your ownership percentages, and certificates from every sub.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Testing the private Arizona market for a contractor who is overpaying or stuck in the assigned risk plan, after fixing class codes and owner coverage, is a review we do at no charge.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.