Workers Compensation Rates : What Insurance companies Don’t Want You to Know!
Workers’ compensation rates have been on the rise around the world.
Wouldn’t you like to know if you are being overcharged?
Insurance companies are notorious for giving people the runaround when it comes to analyzing their Workers Compensation premium amounts or the calculation of their experience https://www.crunchbase.com/organization/workers-compensation-leads modification rating. It’s in the insurance company’s best interest to keep you ignorant about your policy. If you knew about these mistakes you would be demanding a refund on your overpaid workers’ compensation premium.
Things They don’t Want You to Know:
Lack of One Business Overseeing the process: The insurance company will only do as much as they have to according to the state insurance laws. They cannot calculate the experience modification factor or develop classification codes. This is done by rating reporting agencies like the National Authorities on Compensation Insurance (NCCI) or in California the Workers Compensation Insurance Rating Institution (WCIRB). The insurance agency or broker is paid by the insurance companies and are at the mercy of contracts with them. Because everybody works independently of each other, too many hands pressing the information you have can lead to mistakes that cause you to be overcharged!
Your Experience Rating Compares Your Company’s Past Premiums with Past Losses: In reality, the formula compares the actual received losses for your company with average loss data for all companies in the state who utilize the same classification codes and similar amounts of payroll.
Large Insurance companies Don’t Make Mistakes: The entire system is predicated upon a method of revealing data that almost guarantees mistakes. First, is simply the “human element” : people making mistakes, leading to the “garbage in : trash out/overpaid premium” problem. Second, there is the timing issue, with revealing the data to the institution that figures the experience modification. Lastly, as we have discussed above, no one is performing a quality control check on themselves or on each other.
There are Errors in the Calculation of your Audit Premium: Unfortunately, many insurance company premium auditors are under tremendous pressure to audit as many policies as possible. On top of that, they are inadequately trained in Workers Compensation laws and auditing procedures. As a result, payrolls are often reported incorrectly. They either are overstated, not tied to legitimate audit rules, or misclassified. Either way, it is costing your company money.
Insurance companies Could not Recommend motivated Audit: The workers’ compensation insurance industry is burdened with errors from wrong classification codes to simple incorrect measurements, costing your business money. Because of the difficulty of the Workers Compensation system and the various entities involved, there is no wide-spread method to correct these errors. Motivated audit would reveal these errors, entitling your company a refund, which might make the insurance companies look bad.
Would you allow an IRS agent to conduct an audit without an expert at your side?
Would it not seem like a good business move if you were to offer the IRS call you, ask you to send them your estimated taxes for the year, then encourage them pick up your records at the end of the year and just trust that they made sure you paid the lowest amount of taxes you used to be legally obligated to pay?
I don’t think so!
A worker’s compensation audit performed by the insurance company may just cost you more than an IRS audit. Typically a workers’ workers comp audit occurs every year, whereas you may never get audited by the IRS.
With Workers Compensation rates skyrocketing these days, it’s a smart go on to speak with a workers comp consultant about reviewing your insurance premiums to make sure that you are not being overcharged.
With over 75 years of combined experience in the workers’ compensation industry, our experience and “inside knowledge” of the system we can understand the complications and red recorded argument that can occur when dealing with workers’ compensation premium overcharges and get you the money you are due.