Premiums After Auto and Workers Comp Accident

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Auto and Workers Comp Accident Premium Comparison

A reader recently asked – Does a Workers Comp accident and an auto accident affect the policyholders’ premiums in the same manner? The answer is yes and no. Let us look at some of the similarities and differences.

Picture Of Car Workers Comp Accident On Road
Wikimedia – Shuets Udono

Workers Compensation and auto accidents both increase the premiums paid overall. They both use the Total Incurred (Paid + Reserves) as main determinant of how much premiums will be charged in subsequent policy periods. Both types of claims affect the policyholder’s premium for at least three years at the time of renewal.

Even though the company may have installed safety measures, the final effects will take up to four years to be realized. The same can be said for auto accidents. Even if the driver is safe for three years, there is still an extra premium to be paid due to the level of increased risk.

Workers Comp and auto accidents will both carry over to another insurance carrier if you decide to switch. No carrier will ignore your accident record.

One of the main differences in Workers Compensation is that the claims staff is given an extra six months after the policy expires for claims development. The most recent policy period is not affected in Workers Comp. As I have posted many times in the past, Workers Compensation is a delayed system when calculating a premium figure.

There is no audit process in auto insurance. No company or person will ever audit an auto insured such as in Workers Comp. I have never heard of an auto insured having to pay extra premium for a prior year.

This was a rather “quick and dirty” comparison.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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