Questions About Assigned Risk Pools
Last week, I posted a short note about the Assigned Risk Pools for Workers Compensation in West Virginia.
I received quite a few questions about the Assigned Risk Pool from West Virginia and other states. It seems that quite a few additional employers are being placed into the Pools that even have good E-Mods. I will try to answer some of the questions in this and the next few posts.
A good E-Mod is one that is less than or equal to 1.0. A good E-Mod can even go up to a 1.2 under certain circumstances.
The trucking industry had experienced that situation a few years ago. A trucking client of ours had an E-Mod of .89 and was placed into the Pool. This was due to the market tightening/hardening on risk. They are now out of the ARP even though their E-Mod had increased to a 1.19 due to a few severe accidents!
We were consulted by an asbestos removal company that tried to get out of the ARP. There was no market to place them in, even though they had not had an accident or occupational illness in the last 10 years.
The quickest way to get out of the Assigned Risk Pool is to heavily shop the insurance market for your Workers Compensation coverage. If you are in West Virginia, you are free to choose a carrier besides Brickstreet, but if you are assigned to the Risk Pool, you must take whatever carrier you are placed with by the Insurance Commissioner and NCCI.
The best way to get out of and stay out of the Assigned Risk Pool is to increase the safety standards that you have in place for your company. If your E-Mod is above 1.1, you are headed to the Assigned Risk Pool. The key to a great E-Mod is not avoiding the one big accident–it is avoiding accident repetition. That is the way the Workers Compensation Experience Modification system has been built. Right or wrong, the system penalizes frequency much more than severity.
My next post will cover Five Keys to Reducing Your Workers Comp Claims, which in turn will quickly bring down your E-Mod.
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