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Obtaining A Policy

  1. What is Workers' Compensation?
  2. How do I obtain a policy with State Fund?
  3. Why are there so many pages to the application? Do I have to fill them all out?
  4. Can State Fund give a quote over the phone?
  5. How are rates determined?
  6. How long does it take to get a policy with State Fund?
  7. Can I submit my application online?
  8. Do I have to pay a deposit?
  9. What is minimum premium?

  1. What is Workers' Compensation?

    Workers' compensation provides benefits to employees who are injured or become ill during the course of or due to employment. In California, every employer is required to carry workers’ comp insurance to cover the cost of occupational injuries and illnesses that arose out of or in the course of employment. This insurance requirement is mandatory even if you have only one part-time employee. Companies based out-of-state with employees hired in California must also have California workers' compensation insurance.

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  3. How do I obtain a policy with State Fund?

    Workers' compensation insurance may be purchased directly from State Fund or through a broker that has an established business relationship with State Fund.

    The first step is to complete our questionnaire/application, which you can get by contacting State Fund's Customer Service Center at 888-STATEFUND (888-782-8338). You can also start the application process online though our “Request a Quote” tool.

    We need to know how many employees you have, their estimated annual payroll, and what kind of work they do. Certain businesses that require licensing are required to provide proof that such licenses are valid and current. If your business has had prior workers' compensation insurance, you will be asked to provide additional information such as loss runs and your policy history for up to five preceding policy years.

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  5. Why are there so many pages to the application? Do I have to fill them all out?

    There is a lot of information required in order to provide you with a quote. All forms must be completely filled out and signed.

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  7. Can State Fund give a quote over the phone?

    No. Calculating a premium quote is not as simple as it sounds. There are many factors that must be considered, including determining the correct job classifications and corresponding rates. Jobs which appear similar may be considered different for classification purposes. State Fund also reviews the type of operation, whether safety plans are in place, and other factors such as experience modification and applicable discounts. For this reason, we cannot to give an estimate over the phone.

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  9. How are rates determined?

    California has a competitive rating system in which all workers’ compensation insurance companies are responsible for establishing their own rates. The Workers' Compensation Insurance Rating Bureau, an advisory arm of the California Department of Insurance, provides carriers with advisory or pure premium rates. These rates are determined by the combined claims costs of each classification reported by all California insurance carriers. These advisory rates include losses and the cost of administering the claims, but do not include insurance carriers' other expenses like taxes and operating expenses, or provisions for profit.

    Since these pure premium rates are advisory in nature, they only serve as a guideline for carriers in pricing insurance. As in any market driven pricing, insurance providers determine their rates by assessing their expected losses and expense costs and analyzing prevailing prices charged by other carriers. These costs include claims administration, increased benefit changes, and (if they are a stock company) stockholders' profits. As with other forms of insurance, you can expect prices and discounts to vary from carrier to carrier.

    An insurance company may start with a basic rate for a classification and then give credit discounts for premium size, a good safety record, or group plan membership. Carriers may have a rating system which further credits or debits a rate based on the individual risk's qualities. For example, a company's early return-to-work program or comprehensive health program for employees may warrant a rate discount. On the other hand, high losses, frequency of accidents, or poor safety controls may not warrant a rate discount. This is similar to how other types of insurance are priced (e.g. good driver plan in auto insurance). After the credits or debits are applied, the rate for the employer is called the interim billing rate. 

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  11. How long does it take to get a policy with State Fund?

    Once we receive a complete application, it normally takes less than one week, but could take up to two to provide you with an insurance quote. Additional information may be required on some applications and this could affect policy inception timing. Insurance coverage will become effective at 12:01 a.m. (PT) the day after State Fund receives the signed “terms letter” and deposit check and any mandatory assessment, unless the broker or the policy holder request a later date.


  12. Can I submit my application online?

    At this time only brokers are able to access online submission. However, you can begin the application process by clicking on Request a Quote. After you complete and submit the online questionnaire, a State Fund underwriter will contact you within one business day to complete an application for insurance.

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  14. Do I have to pay a deposit?

    State Fund requires a deposit on all policies, due when the policy becomes effective. The deposit is based on a percentage of your estimated annual premium.

    If you have further questions, please contact the Customer Service Center at 888-STATEFUND (888-782-8338).

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  16. What is minimum premium?

    Basically, minimum premium is the least amount for which the insurance provider is willing to insure an employer for a given policy which normally is for one year. Each insurer files their minimum premium with their rating plan to the California Department of Insurance. For example: An insurance carrier has set a minimum premium of $500 for your type of business. Assuming your actual annual payroll is only $20,000 with a manual rate of .78 per $100 of payroll, your calculated premium would be $156 ($20,000 x .78 ÷ 100). However, you would still pay $500 in minimum premium instead of $156, since your insurance company has set its minimum premium at that level.

    If you have further questions, please contact the Customer Service Center at 888-STATEFUND (888-782-8338).

    Additional State Fund FAQs

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Note: State Compensation Insurance Fund is not a branch of the State of California.

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