Yes, in most states another insurance company can charge you a different price for the same workers comp coverage. Most states let each insurer set its own rates, add a discount or a surcharge of up to about 25 percent either way, offer a dividend, and set its own payment terms. Who this is for: contractors whose renewal bill jumped, or who have never had their workers comp shopped.
The short version
- In most states each insurance company sets its own price for the same job category, so two quotes can differ by thousands.
- Discounts and dividends move the price even where the state fixes the base rate.
- A better rate is not the same as a correct rate. Fixing a wrong job category often saves more.
- Your claims history follows you. A new insurer uses the same multiplier the old one did.
- Shop 60 to 90 days before renewal and compare quotes line by line.
Why can two insurance companies charge different prices for the same workers comp?
Your workers comp price has three parts: your payroll, the rate for the job category your payroll is rated under (insurers call it your class code), and a multiplier based on your claims history. If your premium is below your state's size threshold, you have no multiplier at all.
In most states the rate is the part that varies. Each insurer files its own price for the same job category, so an electrician can pay one rate at one insurer and less at the next.
| What moves your price | Who controls it | How much it can move (illustrative) |
|---|---|---|
| Rate for your job category | Each insurance company, in most states | Often 10 to 30 percent between insurers |
| Claims multiplier | The group that sets job category rules in your state (the rating bureau) | Most rated contractors fall between 0.80 and 1.40, and small payrolls are not rated |
| Discount or surcharge | The person who prices your policy (the underwriter), who calls it a schedule credit or debit | Up to 25 percent either way where the state allows it |
| Dividend | The insurance company, after the year, if claims stay low | Often 5 to 15 percent, never guaranteed |
Deeper reading: how workers comp works.
Which states do not let insurers set their own rates?
In a few states every insurer must charge the same base rate for each job category. Massachusetts, New Jersey, Florida, Wisconsin, Indiana, North Carolina, and Idaho are the main ones. Switching there does not change the rate. Savings come from discounts where the state allows them, dividends, and correct job categories.
Four states work differently again. North Dakota, Ohio, Washington, and Wyoming sell workers comp only through a state fund, so there is nobody to switch to. Savings there come from the fund's own discount and refund programs, correct job categories, and safety. Washington also charges by the hour worked instead of per $100 of payroll. See workers comp cost in Massachusetts and cost in New Jersey.
When does switching insurance companies actually save money?
- Your insurer's rate for your trade is high. The insurers that want roofers price roofers lower.
- You have a clean record and no discount. Another insurer may give you one.
- You are in the state's plan of last resort. That plan costs more. After a clean year or two, an insurer may take you.
Switching does not help when the problem travels with you. Every insurer uses the same claims multiplier, a wrong job category gets audited the same way anywhere, and a large open claim can earn a surcharge.
What should I compare before I switch?
Every quote should use the same job categories, the same payroll, and the same claims multiplier. A cheaper quote built on less payroll gives the savings back at the year end audit.
- Same job categories. A quote that moves your foreman into an office category is not cheaper, it is wrong.
- Same payroll. Use year to date payroll, not last year's estimate.
- Discounts and dividends, listed separately. A dividend is a maybe. A discount is real.
- Cancellation cost. In many states, leaving before the year is up is short rated, so you get back less than the premium you have not used. Other states, and some reasons for cancelling, give the full unused part back. Ask first.
- Certificates and waivers. Every customer needs a new certificate, and any waiver of subrogation (your insurance company agrees not to go after your customer to recover money it paid) must be added again.
How much can switching save?
An illustrative example for an electrician with $400,000 of field payroll. Real prices depend on trade, payroll, state, and claims history.
| Quote | Rate per $100 of payroll | Discount | Annual price |
|---|---|---|---|
| Current insurer | $4.50 | None | $18,000 |
| Insurer B | $3.90 | None | $15,600 |
| Insurer C | $4.10 | 10 percent | $14,760 |
The spread is about $3,200 a year, which is common where insurers set their own rates. Where every insurer charges the same base rate, the first two rows would match.
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 plumbing contractor in Arizona with six field employees and $520,000 of payroll has renewed with the same insurer for five years. The renewal comes in at $27,500, up from $24,900, with no claims in three years.
What went wrong: Nobody had shopped the policy. The insurer had raised its filed rate for plumbing two years running, and the account carried no discount even with a clean record.
What it cost: A broker sent the same payroll and job categories to five insurers. The best quote was $21,800 with a 10 percent discount, so the owner had overpaid by about $5,700 a year.
The fix: Shop workers comp every year or two, 60 to 90 days out. Send the broker your policy, payroll by job category, and your claims history.
Frequently asked questions
Q: Can I get a better workers comp rate with another insurance company?
In most states, yes. Each insurance company files its own rates and adds its own discounts and dividends, so the same business gets different prices. In a few states the base rate is the same everywhere, and only discounts, dividends, and job categories move the bill.
Q: Why did my workers comp price go up when nothing about my business changed?
Your insurer may have raised its filed rate for your trade, dropped a discount, or your claims multiplier moved because a claim entered or left the three year window. Ask for the renewal breakdown.
Q: Does my claims history follow me to a new insurance company?
Yes. That multiplier is set by the rule setting group for your state, not by the insurer, so every insurer applies the same one. If your premium is below your state's size threshold, there is no multiplier to apply.
Q: Is the cheapest workers comp quote always the best deal?
No. A quote can be cheaper because it used less payroll or the wrong job categories, and the audit takes the savings back. Compare payroll, job categories, discounts, and whether the dividend is promised or only possible.
Q: What if my state has only a state fund, or I am in the plan of last resort?
In the four states with only a state fund there is no other insurer, so focus on the fund's own discount and refund programs and on correct job categories. Elsewhere, a clean year or two often gets you back into the open market.
Q: Can an insurance company turn me down when I try to switch?
Yes. Insurers pick the trades and claim records they want, so a roofer with two open claims gets fewer offers than a plumber with none. That is what the state's plan of last resort is for.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Shopping a contractor's workers comp across many insurance companies, with the same payroll, job categories, and mod on every quote, is something we do every week.
- 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.