What is an Experience Mod Rating?


So you just received a letter from someone called the NCCI and you are probably wondering, “What is an Experience Mod Rating”? You are probably also wondering, “Who is the NCCI”. Today we are here to answer these two questions. To prevent confusion, let us take those questions in reverse order.

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Question 2: Who is the NCCI? The NCCI is short for the National Council on Compensation Insurance or as I like to lovingly call them, “The Bureau”. Their job is to help determine how much money worker’s comp insurance should cost. They do that by assigning an experience rating to worker’s compensation policies purchased by businesses. They are non-profit and most states participate. Some states, like New York, Delaware, California, and a few others have their own rating bureau’s.

Question 1: “What is an Experience Mod Rating”? An Experience Mod Rating or “EMR” for short is one of the most important factors in determining your worker’s comp insurance premium. You have more control over this factor than any other piece of your insurance program. The factor is expressed as a number and that number is multiplied by your “estimated manual premium” and used to determine your “modified premium” For example, if your manual premium is $10,000 and your EMR is .90, your new premium will be $9,000. On the flip side of that coin, if your manual premium is $10,000 and your EMR is 1.10, your new premium will be $11,000. Clearly, .90 is the preferred factor. Fortunately, or unfortunately, these factors can go much lower than .90 but they can also go much, much higher. We have seen EMR’s as high as 1.92. In this case, that same $10,000 premium would increase to $19,200.

The good news is if your experience mod is above a 1.00 there is a way to lower it. In fact, there are many ways to lower it.

For a free evaluation of your experience modification factor or questions about your EMR over 1.00 please contact:

Josh Gurley, CIC CWCA



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