Experience Modification Rate (EMR) Calculator
Primary losses count in full, so frequent small claims raise a mod more than one large claim of the same total. A claim stays in your mod for each rating year it falls in the experience period.
How the experience modification rate (EMR) calculation works
Take the numbers from your worksheet
Your experience rating worksheet lists expected losses, expected primary losses, your actual primary and excess losses, and the weighting (W) and ballast (B) values.
Add up the actual side
Actual primary $9,000 + W × actual excess (0.12 × $15,000 = $1,800) + (1 − W) × expected excess (0.88 × $28,000 = $24,640) + ballast $25,000 = $60,440.
Add up the expected side
Expected losses $40,000 + ballast $25,000 = $65,000.
Divide
$60,440 ÷ $65,000 = 0.93, a 7% credit. On a $30,000 base premium that saves $2,100 a year.
Worked example. With $40,000 of expected losses ($12,000 primary), $9,000 of actual primary and $15,000 of actual excess losses, W of 0.12 and ballast of $25,000, the mod is 0.93. One new $30,000 claim with a $20,000 split point would raise it to 1.26, costing $9,900 a year on a $30,000 base premium.
Experience Modification Rate FAQ
What is an experience modification rate (EMR)?
A factor that adjusts your workers' comp premium based on your claims compared with businesses of similar size in the same class codes. 1.00 is average; below 1.00 lowers your premium and above 1.00 raises it.
What is a good EMR rating?
Anything below 1.00 means your claims history is better than expected and earns a credit. Some project owners set a maximum mod for contractors who bid; it's stated in the bid documents.
How is the experience mod calculated?
Total A (actual primary losses + W × actual excess + (1 − W) × expected excess + ballast) divided by Total B (expected losses + ballast), rounded to two decimals. Your state's rating plan may add limits or caps, and some states use their own formula; your worksheet shows the exact one.
Why do small claims hurt my mod so much?
Primary losses (each claim up to the split point) count in full, while the excess part is weighted down. Many small claims are therefore costlier for your mod than one big claim of the same total.
Where do I find my worksheet?
Ask your insurance agent or insurer for your experience rating worksheet. It's produced by the rating organization for your state.
How long does a claim affect my mod?
Usually for each rating year whose experience period includes the policy year of the claim, which is typically three years. Check the period on your worksheet.
Sources: NYCIRB: New York Experience Rating Plan Manual, Rule 2 (formula and elements)