Blog Reader Question- What is a Bad E-Mod

We are renewing our Workers Comp policy in October. Our E-Mod has increased quite significantly from .8 to 1.29 over two years' time. Our agent has said that if our E-Mod increases much more, certain insurance carriers may not write us and we may even have to go into the Risk Pool. We are a multi-state restaurant corporation based out of California.

Is an E-Mod of 1.29 a bad Experience Rating?


Answer - An Experience Mod of 1.29 may not necessarily be that bad. Your Workers Comp carriers and other insurance companies may be looking at the large increase from .8 to 1.29. This means that your company has become basically 50%+ more risky to underwrite than in the past. You desperately need to have an expert review your Workers Comp claims loss run now to see if your files are over-reserved. Did you recently change carriers? Watch out for the Unistat date for your policy. That is when you need to have your Workers Comp reserves in line.

The overall insurance market in California has experienced a reduction in premium rates over the past few years. However, there is a 16%+ overall premium rate increase pending. I have seen where a group of trucking companies had to go into a risk pool and their E-Mods were basically about 1.0! This was due to a lack of Worker Comp insurance companies that will underwrite a certain Classification Code.

As your E-Mod (Ex-Mod in CA) increases, the likelihood that a conservatively priced insurance carrier will underwrite your company decreases. Remember, all carriers can file Classification Rate rate exceptions to the state-supplied rates.

Next Up - Another Question on E-Mod/Ex-Mods.