Texas Department of Insurance

A Survey of Workers' Compensation Insurance Deductible Programs

Introduction

Deductibles for workers' compensation insurance are a relatively new concept. The first programs began in the early 1980s with limited deductible options for medical and death benefits. More recently, large deductibles have become a significant force in the workers' compensation insurance marketplace.

A deductible is defined as the dollar amount which an employer is required to pay either on a per claim, per occurrence, per accident or annual aggregate basis. The deductible can also be a combination per accident or per claim with an annual aggregate cap, which limits the employer's total annual risk to that aggregate limit. All insurance deductible programs described in this report require that the insurer pay the full claim, then seek reimbursement from the employer for amounts not exceeding the agreed upon deductible level.

The purpose of this study is to provide information about the availability of workers' compensation insurance deductibles. This study examines deductible programs or the lack of such programs in each of the 50 states plus Puerto Rico and the District of Columbia.

For more information contact: WCResearch@tdi.state.tx.us