Workers compensation insurance is required in every different state. The premium depends on the state, the industry, and other factors like your Experience Modification Rating, or Experience Mod. Understanding and tracking this rating will help you discern how well your loss prevention practices work and can help you reduce your rates.
Experience Mod compares your workers comp claims to that of other companies within your industry of about the same size. Virtually all companies with a yearly premium over $3,000 receive an Experience Modification Rating on their workers compensation insurance.
The National Council on Compensation Insurance generally calculates the Experience Mod. Some states, however, make use of an independent agency for this calculation. Your insurance agent has info on where yours is calculated.
The calculation will be based upon your class codes, payrolls, and losses for the 3 years before the year prior to the date of the rating period. It means that your 2010 Experience Mod was based upon the details given by your insurance agency.
The Experience Mod is reported for your workers comp rates in one of 3 rates. A typical rating is 1.0 and means your workers comp experience is average within the industry. If your experience is worse than the average by say, 20%, your rating is 1.20, while a workers comp experience that is 20% a lot better than the average receives a.80 rating.
Experience Modification Rating is a technique of rewarding or penalizing companies for their safety management. The lower your rating the lower your workers comp rates are going to be, while the higher your rating the higher your workers comp rates are going to be. If your yearly premium is $66,000 and your Experience Mod is 1.20, then your premium increases by $13,200 for that year, making your annual premium $79,200. Conversely, if your rating is.80, then your premium will decrease by $13,200 for that year, making your annual premium $52,800. Your workers compensation insurance is greatly influenced by this rating.
Having no claims is best. However, a lot of companies do have some kind of claim. Medical-only claims that don?t require loss of time are reduced by 70% before being figured into the equation. Implementing a return to work program can help make use of this factor.
The first $5,000 of each loss of time claim is counted at full value, and anything over that is discounted. Which indicate that your Experience Mod is less impacted by a large single claim than it is by multiple small claims.
Cutting Your Workers Compensation Insurance Premium Monitoring your Experience Modification Rating and your safety management can decrease your workers comp rates.
Go to Lessen Your Workers Comp Fees With Experience Mod For more information..
Source: http://restraq.com/finance/lessen-your-workers-comp-fees-with-experience-mod/
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