For many businesses, Workers’ Compensation insurance premiums are a significant operating expense. Fortunately, there are a number of ways in which businesses can reduce unnecessary costs. These include safety and accident mitigation programs, return to work programs and health and wellness plans.
One of the most significant ways in which we assist our clients is by managing their experience modification (X-Mod) factor. Understanding your X-Mod and how it impacts your premiums can go a long way in ultimately reducing your Workers’ Compensation Insurance premiums.
What is the X-Mod?
A company’s X-Mod is a number that is unique to each company expressed as a percentage. It is an indicator on how a company’s losses compare to other employers within the same industry. It is an indicator of how “safe” your company is when compared to others similar to it.
Who Determines Your X-Mod?
In California, a company’s X-Mod rate is determined by the Workers’ Compensation Insurance Rating Bureau of California (WCIRBC). Using a three-year safety history as reported to the WCIRBC by your insurance company, the board will assign a rating to help determine your rate. If a company is within average parameters it is assigned a rating of 100 (100%) and will be charged the full rate. If it is safer than others in its category, it will be assigned a lower number, and if it is more dangerous, it will be determined to receive a higher number.
How it Impacts Your Workers’ Compensation Rate
Once your base rate is determined by multiplying your payroll per $100 times your classification rate, you then multiply that by your X-Mod to determine your final premium. Therefore, if your X-Mod is lower than 100 you will get a cheaper rate than average and if it is higher you will pay above average.
How We Can Lower Your X-Mod Factor
At Arroyo Insurance Services we help manage your X-Mod by first making sure all the information supplied to the WCIRBC is accurate. We look at potential payroll amount errors, closed claims that may be unnecessarily open, and review classification codes and claims history. We encourage our clients to invest in a safety strategy program, and we assist in managing and investigating claims.
When we help improve your loss experience we begin to improve your X-Mod and lower your premiums.
For more information on Workers’ Compensation insurance and how Arroyo works with clients to minimize premiums, please feel free to contact us. Let’s work together in lowering your rates.
About Arroyo Insurance Services
Arroyo Insurance Services was officially established in 1986, but we have roots dating back to before 1950. One of California’s leading client-oriented and independently owned agencies, we have over 140 employees with a combined experience of over 450 years, spread across 11 locations. We are committed to providing the best insurance and risk management services at the most competitive premiums, and backing it with hands-on service tailored to our customers’ needs. For more information on how we can mitigate your risks, contact us today.