There are three criteria
which the insurance companies generally use to determine the payment
of premiums. These are (1) the payroll; (2) the employer
classification; and (3) the experience record and number of
accidents and severity of injuries included for this employer.
The first element
considered is the payroll and these are determined in blocks of $100
of payroll sums. The second consideration is how an employer will be
classified into different categories by industry type. Each
classification is designated to pay a certain amount of workers'
compensation premiums per $100 block of payroll. Roofers who are at
a high exposure to injuries will have a higher experience factor
than office personnel who have a low exposure to injuries.
The last consideration is
what is known in the industry as the "experience modification
factor" or "experienced mod" or simply the "mod." This calculation
applies to policies with more than $5,000.00 in premiums. In
determining the experience mod, the individual employer is compared
with other employers within the classification based upon the
frequency of accidents and severity of injuries. The more accidents
an employer has had in the past, the higher the modification