A Workers Comp Renewal On January 1 Is A Crowded Road
A Workers Comp renewal on January 1 creates five ways (or more) to harm your WC program. In my many years working for insurance companies and TPA’s, I have found that employers and their agents start to rush everything through to get their Workers Comp policy ready to renew on 1/1. These five areas are critical to reducing or avoiding an increase in Workers Compensation premiums.
1. Why is your business renewing on 1/1? A large majority of policies renew on 1/1. Moving your renewal date to February 1st means that you are not in the mad rush to renew by the first of the year. This renewal date will let your agent and underwriting department have more time to renew your policy. It is the same as not running an errand during rush hour traffic.
2. There is no need for a rushed reserve review now. Your Experience Modification Factor (Emod or Xmod) was cemented in place many weeks ago. There is no use to try to fix it now as it is too late.
3. It is advisable to not use the same payroll figures from last year. As many businesses have cut back on staff and/or hours over the last few months, it is advisable to use a forecast of lower payrolls. If your company has more payroll than expected, the premium auditor will correct it at the yearly premium audit. This is a careful balancing act as forecasting the payrolls too low will result in a sticker shock at the premium audit.
4. Renewing with the same insurance carrier without questioning your agent. Workers Comp insurance carriers change their variables and rating values often. There are very few instances where staying with a certain carrier will benefit an employer. Brand loyalty can sometimes be very expensive in the insurance business.
5. Do you know the name and email addresses of all the Workers Comp adjusters who are working on your claim files? If you do not, your company is throwing money down the drain. The adjusters function just like a financial adviser in any other financial institution. The reserves your adjusters set on the files are the main figures that feed into your E-Mod.
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