Workers’ Compensation, Experience-Modifier, and How Litigation is Adding to Our Claims, August 2015

Introduction:  Workers’ Compensation (WC) insurance costs to the dealership are increasing more than other costs and much faster than inflation.  In this newsletter, we explain:

  • How WC Insurance Premium is calculated based on payroll
  • How manual premium rates are based on risks of the worker, e.g., the office worker has a lower manual rate compared to an auto service technician due to hazards on the job
  • How employers with greater injury rates have a higher Experience Modifier (ex-mod)
  • How a higher ex-mod results in higher premiums
  • How WC rates have climbed over the years
  • How Medical Indemnity has more than doubled over 15 years
  • How Allocated Loss Adjustment Expense (ALAE) per Indemnity Claim has tripled over 15 years

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