Best Workers' Comp Insurance in Texas

These rates are estimates based on MoneyGeek's analysis of small businesses with two employees across 79 major industries. Actual rates vary based on your business location, industry risk factors, claims history, coverage limits and individual insurer underwriting criteria. Contact insurers directly for personalized quotes.

These rates represent small businesses with two employees across 79 major industries and focus solely on workers' comp policies. Your actual premium depends on your business location, industry, employee count, claims history, coverage limits and other factors insurers consider.

Texas is the only state where private employers can opt out of workers' comp. About 25% of Texas businesses choose non-subscription, including Walmart, HEB and Target. Insurers must price policies attractively or lose customers to businesses that skip coverage entirely. Non-subscription pulls higher-risk employers from the insurance pool while forcing carriers to compete against no coverage, keeping premiums lower for small businesses that purchase policies.

HB 7 transformed Texas workers' comp from one of the nation's weakest systems to one of the healthiest. Insurance rates dropped 72% since 2003 by slashing medical dispute resolution from 335 days to 47 days, implementing evidence-based treatment that achieved 92% return-to-work rates within one year, cutting opioid prescriptions by 86% and reducing overall health care costs by 30% through Medicare-based fee guidelines. These reforms eliminated inflated medical expenses and administrative waste that insurers passed to employers through higher premiums.

The Texas Department of Insurance approved an 11.5% average loss cost decrease effective July 1, 2025, following an 11% decrease in 2024. These back-to-back cuts reflect improved claims experience across the system. Injuries cost less than actuaries projected thanks to continued reform success, better workplace safety, stable medical costs and a highly profitable competitive market. Small business owners renewing policies after July 2025 see base rates drop roughly 11.5% compared to last year, though specific rates depend on classification code, claims history and insurer.

Texas allows insurers to implement rate changes immediately after filing, without waiting for regulatory approval, creating a dynamic competitive market where rates vary between companies. Insurers adjust pricing quickly to compete for business. Each company sets its own loss cost multiplier based on its expense structure and risk appetite, as there's no standardized rate filing. You can find better rates by shopping around, but you must shop regularly since the most competitive carrier changes frequently.

Texas Mutual Insurance Company controls 42% of the market and serves as both the state fund and insurer of last resort, created in 1991 to stabilize skyrocketing rates and poor market capacity. Its dual role provides guaranteed coverage that prevents hard market cycles, sets pricing benchmarks that private insurers must match and maintains exceptional financial strength with $600 million in policyholder surplus. As a mutual company, Texas Mutual returned $445 million in dividends since 1999, reducing policyholders' true coverage costs while its market dominance keeps competitors' pricing competitive.

Employers choosing certified health care networks receive an immediate 12% annual premium discount from coordinated care, evidence-based treatment guidelines and reduced unnecessary procedures. Networks deliver higher return-to-work rates than non-network care, require providers to demonstrate disability management effectiveness and reduce medical disputes that drive administrative costs. The discount is guaranteed for eligible employers. Businesses with employees in rural areas should verify network provider access meets their workforce needs before committing to the restriction.

The 2025 SAWW of $1,218.62 sets maximum weekly benefit amounts for injured workers and establishes fixed annual payroll of $79,200 for sole proprietors, partners and working spouses regardless of actual wages paid. Higher SAWW increases maximum benefit payouts per claim, requiring insurers to charge higher premiums to cover that exposure. Wage inflation signals rising indemnity benefits that increase claim costs. Sole proprietors pay premiums based on the fixed $79,200 payroll even when actual compensation runs lower, preventing manipulation but eliminating premium reduction opportunities.

Companies file loss cost multipliers that cover expenses such as agents' commissions, profits, and taxes. Final rates are calculated by multiplying the Texas Department of Insurance's advisory loss cost by each insurer's unique LCM. Rate variation exists between insurers for identical businesses because expense structures differ: large national carriers versus regional insurers, carriers with extensive safety services versus those with bare-bones operations, and varying profit margin targets. The profitable Texas workers' comp market (10% average return versus 7.4% nationally) allows some insurers to use lower LCMs for market share, while others maintain higher multipliers to meet financial targets.