How the experience modification ratings are established in California and what you can do to impact yours. 

Insurance is the spreading or sharing of risk by a group of policyholders who are likely to experience losses. The losses of an entire group can be predicted with a fair degree of accuracy. However, it is not possible to determine which group member will actually have a loss.

Because of this, the cost of insurance is apportioned to each member on the basis of average cost for the group. It is assumed that each member’s own experience will approximate the average. In reality, very few risks are really average; some are much worse, and some are much better. Experience rating recognizes these differences to encourage the prevention of industrial accidents.

Learn more about ExMod in our guide, including:

  • How ExMod is calculated, and how often these numbers are updated.
  • What specific factors influence the way your company is rated over time.
  • How ExMod applies to different size businesses and business types.

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