Staying on top of Claims—How Reserves Impact the cost of your Workers’ Compensation Insurance
One of the biggest impacts on the cost of your workers’ compensation program is your experience modification factor. This item is calculated each year by the National Council on Compensation insurance for all insureds within the State of Florida. To offer out a very simplistic explanation, it is calculated based on your premium history along with your expected and actual (total incurred) losses.
It is important for you to understand that your total incurred losses include paid claims and reserves, as of the time of the data transmission, which is approximately six months prior to your renewal date. If your claims are over-reserved at that time, this can lead to a higher than necessary experience rating factor. Since your final premium is determined by multiplying the base premium by the experience rating factor, this can result in an unnecessary increased cost to you next year.
WCA will contact you when a claim first occurs to find out in your words exactly what happened. We will
also listen to any concerns you have and answer any questions. We will relay this information to the adjuster and then stay in regular contact with the adjuster to make sure the claim is running smoothly. We will also contact you when issues become present or have questions or concerns. We encourage you to stay in touch with our office as well.
We will work closely with the adjuster to make sure that claims are closed as quickly as possible and reserves are kept at a minimum at all times. This way, when the NCCI inserts your payroll, premium, classifications, and claim information into the formula to compare your company to your industry in Florida, your experience rating is an accurate recollection of your firms history and claims.
NCCI will mail you a letter usually a couple months before your renewal date. Do not throw it out. The letter contains your unique Risk ID and a PIN. With these two numbers, you can download your upcoming experience rating worksheet and review it. While the worksheets can be very confusing, we are more than happy to review it for accuracy and discuss it with you.
Here is a link to their Worksheets on Demand Service: Click Here:
So much goes into the experience rating. It is difficult to explain it in a short article.
Here is the link to the different articles and video's on experience rating: Click here
If you have questions, please call us at (561) 500-FLWC (3592).
This is one of the many services provided by Work Comp Associates, Inc.