What Is Ex Mod Insurance?

Ex Mod Insurance

Insurance agencies use many methods to assess the risks associated with your business. An experience modification calculation compares your workers’ compensation claims or losses with other companies in your industry. Agents then apply the resulting percentage to determine the monthly premium for your ex mod insurance.

How Does an Ex Mod Work?

This way of determining your rates involves expressing your business’s risk as a percentage based on the loss history of other similar operations. If you have frequent workers comp claims, your ex mod number will be higher, making your monthly rates increase. If your loss history is below that of other employers in your industry, your premium costs will be less.

How is the Percentage Calculated?

Insurance agents divide your actual losses by your expected losses over a specified timeframe to get your ex mod number. Actual losses refer to indemnity or medical costs resulting from job-related injury claims. Expected losses are the average projected losses for your industry.

How Can You Lower Your Ex Mod Rate?

Create and maintain adequate safety and training programs. If your employees are following protocols, your company will have fewer work-related accidents. Make sure everyone within your organization understands the importance of a safe work environment.

Ensure that you have clearly defined steps for correctly reporting injuries as well. Managing claims promptly can significantly affect the expenses associated with the concern.

With effective claims management and clear safety procedures, you can reduce workplace accidents and lower your ex mod insurance costs.