Experience Modification Rates Explained
The experience modification rate (x-mod) is a factor calculated by the WCIRB that adjusts your workers' compensation premium based on your claims history versus similar businesses. A mod of 1.00 is average; below 1.00 lowers premium; above 1.00 raises it.
Key Takeaways
- A mod of 1.00 is average for your class codes.
- Below 1.00 lowers premium; above 1.00 raises it.
- The WCIRB calculates the mod from several years of claims data.
- Reducing claim frequency and severity improves the mod over time.
What the Experience Modification Means
The mod compares your actual losses to expected losses for your class codes over several years. It multiplies your base premium, so it directly raises or lowers cost.
Above 1.00 vs. Below 1.00
Above 1.00 indicates worse-than-average experience and increases premium; below 1.00 indicates better-than-average experience and decreases premium. Medical-only claims have a reduced impact compared to indemnity claims.
How to Improve Your Mod
Safety programs, prompt claim reporting, modified-duty return-to-work roles, and active claims oversight reduce frequency and severity. Improvements appear over several years as older claims exit the experience period.
Frequently Asked Questions
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