California Workers Comp Insurance and Mods

California Workers Comp Insurance and Mods

Even the Best California Workers Comp insurance plans regularly fall short of delivering the benefit to businesses that they hope for. The California Workers Compensation marketplace is a complicated maze that can leave nearly all business owners with as many questions as answers.

How Do I Lower My California Worker’s Comp Insurance Rate?

CA Worker’s Comp insurance costs can be lowered significantly by coordinating all the available resources available to reduce the number and size of claims. In insurance we refer to these two cost drivers as frequency and severity.

First Step:

It starts by understanding that the rates an insurance company charges you for your California Worker’s Compensation Insurance can be debited, or credited by as much as 55%!

Second Step:

The second thing is to understand how your modification factor is determined. Understanding the cost of a Workers Compensation claim isn’t an easy task. GDI Insurance Agency, Inc. uses a software program to both project what your companies Workers Comp modification factor is today, will be next year, and to project your trend 2-5 years in the future.

Next is to make sure your company is in compliance. Illness and Injury Prevention Plans are the foundation that support CAL OSHA compliant safety programs. All should be coordinated to reduce the number and size of claims you have. Looking back at your loss history is a good place to learn what should be done first.

Third Step:

Getting quotes from almost every insurance company is the 3rd step… A broker from GDI Insurance Agency can help you with everything you need to do!  Call us today 1-888-991-2929!

Guide To Developing a Workplace Injury & Illness Prevention Program

Answers questions about Workplace IIP and how to build your own!

Money Saving Workers Compensation Tips

A full report on how to reduce your Workers Compensation Insurance. 

What is Experience Rating for California Workers Comp Insurance?

The intent of Experience Rating is to provide a multiplier/factor by which Workers Compensation insurance premiums can be more adequately charged to businesses based more closely to their risk/hazard level. Ideally a business with ZERO claims should pay a lower Rate as compared to a business with multiple Workers Compensation claims/injuries.

The WCIRB created the Experience Modification Rating Factor, also known as the “X-Mod”, “Mod”, “ERM” (Experience Rating Modifier), as a means to REQUIRE carriers to account for the approximate level of risk of each insured/business – which in turn should eliminate the majority of Gamesmanship in rating of individual policies.


  • X-Mod is Less than 100 (1.00): Considered a “Credit” X-Mod in that the business will receive a credit from the factor on their Workers Compensation Premium. Example: A business with an X-Mod of 0.87 would result in the business receiving a rate that is 13% lower than that of an “average” business.
  • X-Mod is 100 (1.00): Considered a “Neutral” X-Mod in that the business will not receive either a credit or a debit from the factor on their Workers Compensation Premium. Example: A business with an X-Mod of 1.00 would result in the business receiving a rate that is the same as an “average” business.
  • X-Mod is Greater than 100 (1.00): Considered a “Debit” X-Mod in that the business will receive a debit (or surcharge) from the factor on their Workers Compensation Premium. Example: A business with an X-Mod of 1.13 would result in the business receiving a rate that is 13% higher than that of an “average” business.

The Experience Modification Factor Calculation

Businesses that are experience rated are now subject to California’s New Variable Split Point Experience Rating System. This means that as their payroll and operation grows, so will their Primary Loss Threshold.

The WCIRB recently adjusted its way of calculating an organization’s X-Mod by doing away with the fixed value for the Primary Threshold for Losses and replacing it with a formula that creates a sliding scale, Effective January 1, 2017. This sliding scale is intended to give a larger Primary Threshold to larger employers (i.e. Organizations with larger payrolls).

The impact we’ve seen has been a compounding of the impact/magnitude of losses on an organization’s X-Mod, which in turn equates to a similar impact to their Workers Compensation premium.

We recently witnessed one of our Nonprofit clients have an increase in their X-Mod of nearly 15% due almost entirely to the change in the calculation. We’ve been working diligently with this Nonprofit as they have approx. 50 employees and volunteers and this 15% increase in their X-Mod will result in an increase in Workers Compensation premium of no less than $18,000 for just this year alone.

GDI Insurance Agency, Inc. is your California Workers Comp Insurance Specialists, call us today 1-888-991-2929!

Our Workers Compensation Insurance Tools Will Put You in the Driver’s Seat!

Our agency can help you build solid loss control and safety programs to help you stay on top of your biggest risk management and compliance challenges, such as:


Workplace Safety Programs

Our transportation industry safety manual and employee safety resources can provide your place of business with useful injury prevention information.


Compliance and Recordkeeping

You are responsible for complying with regulations from OSHA, DOT and more. Let us show you how to do so correctly.


Managing Risks

We have the risk management expertise to help you plan and control resources and activities in order to cost-effectively fulfill your objectives.


Building a Safety Culture

Our employee safety materials help you promote a safety-minded workplace. We have flyers, posters, payroll stuffers.


DOT/FMCSA Compliance

We have reference materials, forms and checklists that will help you remain in compliance with DOT/FMCSA regulations.

California Workers Comp Insurance – A Finance Mechanism

Unlike most business insurance policies, a Workers Compensation insurance is better thought of as a Finance Mechanism. Most Business Owners typically pay 2-3x or more for the amount paid out in a Workers Compensation claim over the 4-5 years following the date of injury by way of higher insurance premiums. For example, if a business is paying $10,000 per year in premium and sustains a Workers Compensation claim paying $100; that business will pay $200-300 or more in additional premiums over the following 4-5-year period.

How Can You Take Control of Your California Workers Compensation Insurance Premiums?

There are many ways to improve the cost structure of your Workers Compensation Program. Through and Active and Collaborative working relationship with your Agent/Broker and other providers the following items can be implemented to improve your position in terms of premium bargaining. The following is a partial list of strategies to move your business from acting in a Reactive way and to move to the PROACTIVE.

Many are at little-to-no out of pocket cost to you!

  • Active Claims Management: Oversee claims as they are reported and proceed to ensure accurate reporting
  • Experience Modification Factor Analysis: Provide insight into what is driving the Workers Compensation premium cost changes
  • Experience Modification Factor Projections: Provide guidance as to what the factor will be for the coming year to allow for preparation and planning
  • Regular Loss Run Review: Routine review of active claims to ensure accuracy of reporting and minimize overstated figures that can cause higher premium costs
  • Safety & Compliance Programming: OSHA (Cal-OSHA) mandated safety training; including materials, courses, and documentation
  • CPR & First Aid Compliance: Reduce the severity of catastrophic claims by having employees trained in how to respond
  • Consolidated Coverage Review: Ensure that claims are reported properly and that duplication across multiple coverage lines does not happen.

The goal of the above programs and others is to protect your business from having unnecessary Workers Compensation Claims, and to protect your performance as interpreted by the Workers Compensation Insurance Companies that will be vying for your business year after year.

Learn About the GDI Client Philosophy!

Safety and Compliance

  • Employee Manual
  • Base Safety Programs
  • Human Resources
  • Employee Training

Insurance & Risk Management

  • Basic Policies - Liability
  • Basic Policies - Employee Benefits
  • Employee Benefits
  • Contractual Transfers

Maximization of Efficiencies

  • Accounting & Taxation
  • Legal Guidance & Council
  • Safety & Training
  • Specialized EPA Inspections & Certifications
  • Inspection Assistance
  • Insurance Visit Support

 If You Think This Sounds Too Good To Be True, Here Is What Just A Few Of Our Clients Have To Say about their GDI Insurance Policies:

"“…$385,000 less a year than we were paying

We looked hard at all our budget items, and insurance seemed to be a big fixed expense. GDI found us a policy for $385,000 less a year than we were paying”

-CA Home Builder

"…found me coverage for $140,000 less a year

When everyone else said that was the best they could do, I called GDI, and they found me coverage for $140,000 less a year than anyone else offered.”

-CA Cement Contractor

GDI Insurance Agency, Inc. Your Trusted Business Insurance Experts

GDI Insurance Agency, Inc.

California’s Leader in Insurance and Risk Management

As one of the fastest growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more. The GDI team has developed an “insurance cost reduction” quoting plan, that provides you with the best coverage at the best rate!

We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business.

Contact us today 1-209-634-2929 for your comprehensive California Workers Comp insurance quote!

Your GDI Insurance Agency Broker Uses These Tools Successful Help You Save On CA Worker’s Comp.

Saving money on your Worker’s Compensation starts with your OSHA compliant safety program