Workers' comp cost in Michigan comes down to three things: how much payroll you run, the type of work your employees do, and your claims history. Michigan does not set one fixed rate every insurer must charge; instead its own rating organization, CAOM, publishes advisory pure premiums by type of work, and each insurer adds its own costs and profit on top and files with state regulators. As of mid-2026, those advisory pure premiums have been trending down, so shopping pays off.
Who this is for: Michigan employers who must carry comp and want to understand what sets the price and how to keep it down.
The short version
- Your premium is roughly your payroll, counted in 100-dollar units, times a rate for each type of work.
- The category your work falls into for pricing, often called the class code, moves the price the most.
- A score built from your past claims, the experience modification rate, raises or lowers your cost.
- Michigan does not use the national rating bureau most states use; its own organization (CAOM) publishes only a starting rate, and each carrier adds its own costs to set the final price, so two quotes can differ.
- As of mid-2026, Michigan's advisory pure premiums have been trending down, the latest in a run of yearly decreases.
What drives your price
| Factor | What it means | Effect on cost |
|---|---|---|
| Payroll | Your total wages, counted in 100-dollar units | More payroll, more premium |
| Type of work (class code) | A category for the risk of your work | Roofing costs far more than clerical |
| Claims history (experience modification rate) | A score built from your past claims | A clean record lowers it, a bad one raises it |
| Carrier | Each insurer adds its own costs on top of the pure premium | Shopping can change the price meaningfully |
How Michigan sets rates
Michigan is a private, competitive market with no state fund, and unlike most states it does not use NCCI. Its own licensed rating organization, CAOM, collects the data and publishes statewide advisory pure premiums for each type of work. Those pure premiums are only a starting point: each insurer adds its own expenses and profit and files its own final rates with the state's insurance regulator, DIFS, which is why two carriers can quote the same business differently. CAOM also computes Michigan's own claims-history score, which is not combined with other states. As of mid-2026, the voluntary-market advisory pure premiums carried an average 3.3 percent decrease effective January 1, 2026, following a small increase the year before, and the assigned-risk plan had a larger proposed decrease on file. Treat exact percentages as a moving target and confirm the current filing when you shop.
How to keep the cost down
The two levers you control most are your classification and your claims. Making sure each employee is placed in the correct type-of-work category matters, because a wrong category can overcharge you for years. Keeping claims down improves the score built from your history, which directly lowers your rate. Reporting your payroll accurately at audit avoids a surprise bill later. And because insurers price differently on top of the same pure premiums, comparing carriers at renewal is one of the simplest ways to make sure you are not overpaying, especially while advisory pure premiums are drifting down.
A Dearborn example
Illustrative, not a quote. A Dearborn light-manufacturing shop with fifteen workers gets a renewal that looks high. When we review it, part of the office payroll was rated at the higher shop-floor category by mistake, inflating the premium. We correct the classification, confirm the claims-history score is applied correctly, and shop the account against several carriers on top of the same advisory pure premiums. The corrected classes and fresh quotes bring the price down without cutting coverage, helped by pure premiums that have been trending lower. See our workers comp for manufacturers page.
Real questions Michigan owners ask
How is workers comp priced in Michigan?
On three things: payroll, the type of work, and your claims history. Your premium is roughly your payroll in 100-dollar units times a rate for each type of work, adjusted by a score from your past claims.
Does the state set one rate every insurer has to charge?
No. Michigan does not set one fixed rate. Its own rating organization, CAOM, publishes advisory pure premiums, and each insurer sets its own final rates on top and files them with the state.
Why do two carriers quote me different prices?
Because they add different amounts. CAOM's advisory pure premiums are only a starting point, and each insurer layers its own expenses and profit on top, so quotes vary between carriers.
What is the biggest driver of my price?
The category your work falls into, often called the class code. It reflects how risky the work is, and it moves the price far more than most other factors.
Are Michigan workers comp prices going up or down?
Down, as of mid-2026. The voluntary-market advisory pure premiums carried an average decrease effective January 1, 2026, the latest in a run of yearly reductions, though exact figures change each filing.
How can I lower my workers comp cost?
Classify your payroll correctly, keep claims down to improve your history score, report payroll accurately at audit, and shop carriers at renewal since they price differently on the same pure premiums.
Why Michigan owners choose Morrow
- We shop the right market for you. In Michigan you buy workers' comp on the open market from any private carrier licensed in the state, because Michigan has no state fund; if no carrier will take you, the Michigan Workers' Compensation Placement Facility (the assigned-risk plan) is the guaranteed fallback, so we can shop your rate freely and still keep a backstop for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Michigan guides
Every Michigan business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Michigan (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Glossary: workers comp class code
- What is an experience mod, and how do I lower it?
- Michigan manufacturer workers comp
This guide is general information, not legal advice. Michigan rules and penalty amounts can change, so verify current requirements with the Michigan Workers' Disability Compensation Agency (WDCA) or a licensed advisor before you rely on them. Last updated: July 2026.