Workers' Comp · California Employers

What is your X-Mod actually costing you?

Your experience modification is a multiplier on every dollar of workers' comp premium you pay. A 1.35 mod means you pay 35% more than an identical company rated at 1.00 — same payroll, same class codes, same work. Put in two numbers off your declarations page and see the figure.

Get a Mod Review How the X-Mod Works
No black box

Here is exactly how that number is worked out.

Your mod is a multiplier applied to manual premium — the premium your payroll and class codes earn before any credit or debit for claims history. Reverse the multiplier and the cost of the mod falls straight out.

01
Divide your premium by your mod to get manual premium, which is what the same payroll would cost at 1.00. premium ÷ mod
02
Subtract that from what you actually pay. The difference is the annual cost of your mod. premium − manual premium
03
A claim sits in your experience period for roughly three rating years, so the annual figure is tripled to show what today's mod costs before it rolls off. annual cost × 3

The three-year figure assumes payroll and rates hold flat, which they will not. It is there to show the scale of a mod problem, not to forecast a premium.

What moves the number

Frequency hurts you more than severity.

Most employers assume one bad claim wrecked their mod. Usually it did not. California's formula weights the number of claims more heavily than the size of any single one, which is why a run of small medical-only claims can do more damage than one serious injury.

The Three-Year Window

Your rating uses three years of payroll and losses, ending about six months before your rating date. The most recent year is not in it yet, which usually means there is still time to act.

Class Code Accuracy

Payroll sitting in the wrong classification distorts both your expected losses and your premium. It is the most common error we find, and correcting it changes the whole calculation.

Open Reserves

A claim is rated on what the carrier has reserved, not what it eventually pays. Reserves left high on claims that have effectively closed keep charging your mod for years.

The part a calculator cannot do

Get a real read on your mod.

The number above tells you what your mod costs. It cannot tell you why it is what it is. That takes your rating sheet and your loss runs, and it is where the money usually turns out to be.

  • Your WCIRB rating sheet pulled and read line by line
  • Payroll checked against the class codes it is actually earning
  • Open reserves reviewed for claims that should have closed
  • A written figure for what a corrected mod is worth at your next renewal
Common Questions

Before you ask.

Where do I find my mod?

It is printed on your policy declarations page and on the rating sheet the WCIRB issues before each renewal. If you cannot find it, your broker or carrier can pull it — and we can request it for you.

Can this predict my next mod?

No, and anything claiming to is guessing. The WCIRB calculates it from three years of payroll and losses against expected losses for your class codes. This shows what the mod you already have is costing you.

Does a high mod cost me work?

Often, yes. Many general contractors and public agencies set a maximum experience modification to prequalify. A 1.00 ceiling is common and 1.25 is a frequent cut-off, so a high mod can take you off bid lists.

Your mod is set once a year. The work happens before that.

By the time the rating sheet arrives the numbers on it are already fixed. We start with employers 90 days out from their rating date.

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