Could a deductible workers' compensation insurance policy save you money? Here are the answers to frequently asked questions (FAQs).

Why consider a deductible policy?

How do deductible workers' compensation insurance policies work?

How are claims costs paid under a deductible policy?

Would a deductible policy make sense in your business?

What deductible amounts are offered?

Are there special requirements for obtaining a deductible?

Where can I find out more about deductibles?

Why consider a deductible policy?

Some businesses can reduce their workers' compensation premiums by making an agreement with their insurance carrier to share the financial responsibility for expenses associated with work-related injuries and illnesses. Under a deductible policy, the carrier and insured business work together to manage claim costs.

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How do deductible workers' compensation insurance policies work?

We offer four kinds of deductibles, designed to comply with Texas Department of Insurance guidelines.

• Per accident deductibles are similar to deductibles on your automobile or homeowner's policy. You are responsible for the costs of each claim up to the deductible limit, per accident.
• With an aggregate deductible, you pay the cost of each claim until the total cost of claims meets a specified dollar amount. Then we take over. The dollar amount you are responsible for is the same, no matter how many claims are filed.
• Combination deductibles offer both per accident and aggregate deductible limits.
• Negotiated deductibles are available if you request a deductible option above that allowed in the other plans, or if your annual premium without deductibles would exceed $100,000.

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How are claims costs paid under a deductible policy?

Claims payments work differently from what you might expect. Under Texas law, as the insurer, we pay all bills associated with claims. We then bill you each month for the claims paid which are within the deductible amount. You must reimburse us promptly. Failure to reimburse the insurer can lead to cancellation of the policy.

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Would a deductible policy make sense in your business?

That depends on several factors. Most important is the amount of your annual premium. Only policyholders with an estimated annual premium above $5,000 are eligible for the deductible plan option. The effect of a deductible on your premium depends on factors such as the type and size of deductible you choose, your hazard group and your premium size.

If you're interested in a deductible policy, you must also be sure of your financial ability to handle reimbursement of claims paid within the deductible and the administrative paperwork.

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What deductible amounts are offered?

We comply with Texas Department of Insurance deductible limits, which differ for each kind of deductible.

Per accident: $1,000 up to $25,000

Aggregate: $2,000 up to $100,000

Combination: $1,000 up to $25,000 per accident, not exceeding $100,000 aggregate

Negotiated: These vary. Negotiated and aggregate deductibles are available for employers who request a limit above that allowed in the other plans, or whose annual premium without deductibles would exceed $100,000.

The amount of deductible available to you may be limited by Texas Department of Insurance guidelines which restrict the deductible to a certain percentage of an employer's estimated annual premium.

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Are there special requirements for obtaining a deductible?

Yes. In addition to your complete application for workers' compensation insurance, we require financial information and a security deposit.

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Where can I find out more about deductibles?

See your insurance agent, or call our information specialists at (800) 859-5995.

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