The process of calculating your exact Experience Mod is complex, but the purpose of the rating is pretty straightforward. How to Calculate Your Workers Comp Experience Mod Each state sets its own dollar value for x-mod qualification. Otherwise, the business will need a premium to exceed $3,500 for more than two policy periods before it can qualify for an Experience Mod rating. Total policy premium exceeds lower threshold for more than two policy periodsĪs an example, the state of Missouri has a one-year threshold of $7,000 in premium before a business will be assigned and X-mod and a Rating Effective Date (RED).
Total policy premium exceeds dollar threshold for one policy period.There are two triggers for qualification: Qualifying for an Experience MOd rating will vary by state, but the overall concept is the same. Some very small businesses may never qualify for an experience modifier in some states. How to Qualify for an Experience Modification Rate?Ī business will not have an Experience Mod for the first 1-3 years after it purchases it’s first workers’ compensation policy. In a nutshell, your Experience Mod is a method for tailoring the cost of worker’s compensation insurance to the specific experience and characteristics of your business.Īnd while this still might sound confusing (and possibly unfair), the good news is the fact an Experience Mod is applied uniquely to your business creates an opportunity for you to manage and sculpt the cost over time through strategic cost-saving programs and processes ( this is our specialty at Rogue Risk). Your Experience Mod may be either a debit or credit to your worker’s comp premiums and, therefore, will increase or decrease the amount you pay for your insurance in response to past loss experience. Your Experience Mod is a premium rating factor (or multiplier) developed by measuring the difference between your actual past worker’s compensation experience (claims) and the expected or actual claims experience to other employers of similar size operating in the same type of business. Your worker’s compensation experience modification rate is the very long and official name for what is commonly known as:įor the purpose of this article, we’ll refer to it as the “Experience Mod,” as this is in our experience the most commonly used terminology (and seems to most accurately depict what worker’s compensation experience modification rate actually is).
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