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Premium Audit Dispute – DIY- Goes Horribly Wrong


Premium Audit Dispute – DIY

A Premium Audit Dispute can go awry if a company is not careful. Last week, I received an email with an audit dispute letter and an additional premium bill from a company in West Virginia. We usually receive one or two of these a month.

Picture of Gavel and Dollars Premium Audit Dispute of DIY

A manufacturer in WV decided to work with their agent and do a premium audit dispute. The result was a nightmare. In my opinion, the classification codes and jurisdictions should have been left as they were in the beginning.

This is a timeline of the results:

  1. The manufacturer thinks there is something wrong with their policies and wants to challenge their present policy and the last three years premium audits.
  2. The company wants their classification codes changed and wanted the workers in Kentucky only counted as WV employees
  3. They find a website with class codes for WV – totally different from premium rates
  4. They write a dispute letter outlining the changes.
  5. They do not check the statistics that go with each class code
  6. The insurance carrier accepts the class codes and jurisdiction
  7. The manufacturer’s E-Mod jumps sharply on all of the policies that were disputed from .89 to 1.23. That is a 38% increase.
  8. The Kentucky employees should have been left as is due to the rate for Workers Comp in WV was actually more expensive.
  9. The manufacturer receives a bill for an extra $113,000 in premiums.
  10. They can no longer bid on certain projects that require a 1.0 or less EMod (ouch).

The caveat is what looks cheaper might be much more expensive. The E-Mod/X-Mod calculation is very complicated when trying to adjust the variables. J&L goes through the laborious task of making sure the Mods are not going to increase enough to offset a refund when assisting an employer.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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