It's crucial to make certain your experience modification rate is accurate.

Experience Modification Rate, EMod, XMod, EMR, Experience Rating, Experience Mod, etc.   Whatever you call it this number it can have a profound positive or negative effect on your business.  The benefits of having a low mod snowball, and, likewise, a high mod's harmful effects snowball as well.  If your mod is higher than it should be you'll certainly pay more than you should but also in other ways you may not imagine.  And, you may also be losing business; losing money on the expense and revenue side of the equation!

Higher Premiums

Everyone understands that the higher their experience modification rating, the higher their premiums.  If your EMR is overstated due to your carrier misreporting data or not following NCCI rules or state regulations, then you are paying too much.  There are numerous examples of how these errors multiply their harmful effects. 

One example I like to use, being located in St. Louis across the river from Illinois, is the Illinois Contractor's Credit Premium Adjustment Program.  Illinois has a special rule that requires a mod below 1.00 to qualify for these lucrative credits.  Well, we've had clients in IL whose EMR we've reduced from above a 1.00 to below a 1.00.  As a result, these customers restored 2 credits to their policies when, prior to these corrections, their carriers were "double dipping" from 1 original error.

Lost Business

There are many industries in which the submission of NCCI Experience Modification Worksheets for new business proposals and contract renewals is common.  Construction is one which comes to mind first for most people.

But, do you work for or aspire to perform work for large, sophisticated corporations?  Office cleaning, transportation, etc?  You will most likely need an experience modification rate factor below a certain threshold to win the business and retain it annually.

Make sure your experience modification rating is accurate and avoid not only losing money, but also losing opportunities that may be on the horizon for your firm.

Higher Rates

If you haven't had an expert review your Experience Rating, how can you know that your broker found the best possible rates from among the carriers with whom he/she does business?

Underwriters have various guidelines for writing business; experience mod, lines of business, class code, premium size, credit history, etc.  They all come into play.  But, rest assured, experience rating level IS one of those guidelines.

​Some of the underwriters and carriers with whom your broker does business could have easily declined to quote your business based on your EMR.  And, you might never know about it.

Stuart Cytron


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