What are California’s laws on self insurance

Free Insurance Comparison

 Secured with SHA-256 Encryption

Asked January 18, 2017

1 Answer


Self insurance infers to a risk fund calculated and set aside on the basis of future losses. Under the plan, the actual as well as possible claims are identified prior to any incident happening. The fund can be used to cover various rising claims from company vehicle accident to workers’ compensation. Statistics indicate that self insurance accounts for a sizable slice of the property-casualty insurance market. Most of the corporations taking self insurance are those frustrated by the high cost of coverage in the market. According to State of California, Department of Industrial Relations, the state runs the largest self insurance program in the US that covers workers compensation. A total of 9,800 employees were actively self insured in 2014. The benefits of self insurance are numerous, they include:

  • the registered persons or companies enjoy greater control over claims and the reserved funds
  • the reserve funds can earn you interest
  • you get the opportunity to administer the fund more cost efficiently compared to maintaining insurance from commercial insurer
  • you have the option to keep all the amount in the reserve in cases the loses realized are lower than the projected claims
  • self insurance helps the companies place a limit on the level of exposure by purchasing reinsurance to cover certain types of claims or excessive insurance

Answered January 21, 2017 by teddyx

Related Links

Free Insurance Comparison

Compare quotes from the top insurance companies and save!

 Secured with SHA-256 Encryption