One marine construction firm came to us with ballooning workers’ comp premiums—and figured it was because of their claims experience. Within a few hours, we found the issue: a miscalculated experience mod. The result? Over $100,000 in savings.
The Fix:
- Experience mods—also called e-mods—are influenced by a company’s past claims, payroll size, and comparison to industry averages. Think of it like a credit score for your workers’ comp insurance.
- The National Council on Compensation Insurance (NCCI) calculates most e-mods. These scores directly impact your premiums.
- A crucial factor is the promulgation date—the date the new e-mod becomes effective for policy rating. NCCI uses loss data submitted by carriers roughly 6 months prior to that date. If a claim is closed or adjusted after this window but before your renewal, the outdated info may still influence your mod.
- In this case, the carrier had submitted a reserve-heavy open claim to NCCI that was actually closed with a lower payout—after the unit statistical data was sent to NCCI by the insurance carrier and before the policy renewed.
- Claim reserves are estimates insurers set aside for potential costs—not actual payouts. If not corrected, they can inflate your mod.
- We spotted the error, filed a correction through the bureau, and resolved the discrepancy. The client’s e-mod dropped significantly, unlocking over $100K in premium relief.
Why It Matters:
- Aggravated inequities like these are common but often go unchallenged.
- Most agents don’t review e-mod worksheets or understand how to dispute them.
- If you’ve never had your mod professionally audited, you could be leaving serious money on the table.
