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Experience Modification Rate Explained

Are You Actively Trying To Reduce Your Rates]?

Being aware of your Experience Modification Rating and checking it regularly, plays a major role in lowering your Workers' Comprates. It is also an great way to monitor how your loss prevention and control practices match up to other companies in your industry.

What is an Experience Mod?

Simply speaking, your Experience Modification Rate compares your workmans comp claims experience to other companies similar in size who operate in the same industry. Most businesses who have annual premiums in excess of $3,000 are given an Experience Modification Rating.

Each year insurance companies pass on your class code, losses, and payrolls for the previous five years to the National Council on Compensation Insurance (NCCI), with the exception of a handful of states that have their own calculating agencies. These agencies use three years of data ending one year prior to the start date of your rating period. To give you an example, if they were calculating your 2008 rate they would check the years from 2004-2006.

How Can Businesses Lower Their Experience Modification Rate?

Maximizing your Experience Modification Rate is one of the best methods to immediately raise the bottom line of your business, which is why it is so important to take the right action


If you don't understand how your experience modification rate is calculated or what the correct rates should be, then in all likeliness you will not be able to do it without help.

The easiest way to lower your experience mod rate is by talking with a workers compensation consultant. There are a few companies out there who will work on a contingency basis and will work to get your rates lowered as well as fix mistakes made by insurance companies that will likely lead to a sizeable refund on past years' policies.

There is a high probability that you have been being overcharged on your workers comp premiums for years and you probably had no idea. Work comp insurance companies are notorious for miscalculating experience modification rates, using the wrong workmans comp classification codes, and not giving businesses all the available deductions.

Work comp insurance companies are out to make money not save you money. It is in the insurance companies best interest for businesses to be in the dark aboutthey are overcharging you.

We have found that approximately 75 percent of businesses are being overcharged. Our company typically finds around $37,500 in refunds after reviewing and fixing mistakes made by insurance companies. The question is how much money is your business losing?

Category: Insurance

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