Call Us Today:

“I Need to Know my Ex-What?”

Notebooks with a pen on top of a desk.

Your experience modification number, that’s what.  In short, an experience modifier, better known as an ex-mod, is a number used by the insurance companies to determine the price of your annual premium based on how much of a risk it will be to insure you. This number is calculated based on your previous loss experience, which is usually affected by the number of worker’s compensation claims you have and how small or large each claim was. It is also calculated based on how likely it will be for you to have a loss in the future.

Calculating an Ex-Mod

We don’t expect you to be an expert on calculating an ex-mod number, but we want you to know what goes into it, because knowledge is power. An ex-mod is expressed as number, usually between .77 and 2.01, based on our experiences. These numbers are technically percentages, that will determine your new premium cost. In other words, if you had an ex-mod of .85, you would only have to pay 85% of your policy’s premium, and would result in a 15% discount. On the other hand, if you had an ex-mod of 1.56, then the price of your premium would go up by 56%, and no one wants that.

It’s important to understand that the last three years of your policy’s record, based on the number of claims you have, determine where your current ex-mod will fall. For example, let’s say you are the owner of “ABC Trucking Company,” and you’ve been claim free from worker’s comp claims for years, leaving you with an ex-mod rate of .87. In this scenario, you’d be doing great, because you’d get a 13% discount on your premium. But suddenly, in March of 2014, you got hit with two big claims that raised your ex-mod up to a 1.12. Now instead of getting a discount, you’re going to pay out an extra 12% on your premium. Not only that, this will reflect on your policy until March of 2017, because you are considered a higher risk in the eyes of an insurer. Even if you had no claims in 2015, 2016, and 2017, your policy would still show that you had the two severe claims back in 2014, and your ex-mod will still be affected. Try to avoid worker’s comp claims at all costs, and if you need to have a conversation about avoiding claims, seek our trusted advisor, Brian, for all of your IC and ISP insurance needs.

Brian P. O’Connor   

Licensed Insurance Agent     (860) 805-7001

Leave a Reply

Latest Posts