When it comes to buying workers’ comp insurance, most business owners focus on one thing: price.
And while getting a good deal makes sense, the cheapest policy today can cost you big tomorrow.
That’s because workers’ comp premiums aren’t just about how many claims you’ve had. They’re about how those claims are handled. If your insurer botches claims management, your Experience Modifier (Ex-Mod) will skyrocket—taking your premiums with it.
Let’s break it down.
Your Experience Modifier (Ex-Mod) is the way your state's independent rating bureau or the National Council on Compensations Insurance (NCCI) indicates your company's risk by comparing your claims history to others in your industry.
Your current Ex Mod is based on your past three years' workers' compensation claims and your premium.
An Ex-Mod of 1.0 means you’re average. But if yours is 1.2, you’re paying 20% more in premiums than a business with fewer or better-managed claims.
And because every workers' comp carrier is legally required to use your Ex-Mod when setting your rates, a bad Ex-Mod follows you no matter where you go.
Many business owners assume all workers' comp policies are the same. After all, state laws mandate that every carrier provides the same basic coverage, right?
Yes—but here's what they miss.
What really affects your costs isn’t just the policy itself—it’s the quality of claims management and injury prevention services your carrier provides.
If your insurer has slow claims processing, fails to guide injured employees through recovery, or isn’t proactive in preventing claims in the first place, here’s what happens:
All of this increases your Ex-Mod—and your premiums. This is why choosing a carrier based on price alone can backfire.
If your workers' comp provider isn’t actively helping you reduce claims and control costs, you’re paying for it—whether you realize it or not.
Some aspects of your Ex-Mod are out of your hands, like:
But you have more control over aspects like:
If your workers' comp provider only talks to you at renewal time, you’re missing out on opportunities to lower your Ex-Mod and reduce long-term costs.
The best time to start making changes is right now—before another claim impacts your next three years of premiums.
At Kinetic, we help businesses like yours take control of workers’ comp costs through:
And one of the easiest ways to protect your business is to report claims fast. Delayed reporting leads to higher costs and longer claims. Find out why fast claim reporting matters here.
Choosing the lowest-priced policy might seem like a win today, but if it comes with poor claims management, you’ll be paying a lot more in the years to come.
Instead, make sure your workers' comp partner is actively helping you prevent injuries, manage claims effectively, and reduce long-term costs.
Want to see how Kinetic can help you lower your Ex-Mod? Let’s talk.