Best Workers Compensation Premiums (in NY)
Looking for the best workers’ compensation insurance in New York?
Are you trying to find the lowest cost workers comp in NY?
I’m going to explain how to get the lowest / best premiums on workers comp in New York, coming right up.
So, you’re probably looking for workers’ compensation insurance here in New York and want to find out how you can get the best deal, or pay the lowest rates. That’s why you clicked on this video, so let’s get into it.
First, let me say that right now, more than any time in my career, insurance companies are fighting over workers’ compensation accounts.
It is a HIGHLY competitive market and for the best accounts out there, there are a lot of options when it comes to buying workers’ comp.
How workers’ compensation premiums are calculated in New York
In NY, like most states, there are a set of rates that the Compensation Insurance Rating Board publishes.
In New York, the base rates published by the Board are called loss cost rates.
These loss cost rates are created by the Board based on years of historical actuarial experience.
Every class code has its own loss cost or base rate, and it changes every year – usually on October 1st based on each class code’s loss experience.
Every insurer uses these loss cost rates as the basis of your premium.
The next component in your rate development is something called the loss cost multiplier or LCM.
The Loss Cost Multiplier as its name implies is a multiplier factor and it is multiplied against the loss cost rate to arrive at the final rate for your class code.
Where the loss cost base rates are created by NY State, LCMs are created by each insurance company doing business in New York.
Each insurer may have multiple LCMs filed with the state to give them rating flexibility when pricing out an account.
Large insurers can have as many as xx LCMs whereas smaller insurers may only have 2 or 3 LCMs.
In New York, LCMs across all insurers range from a low of 1.00 to a high of 1.744
The lower an LCM the lower the final rate will be for a class code which will result in the lowest premium.
Now, you’re probably saying,
How do I get to the lowest LCM so I can pay the lowest workers comp premium?
The answer isn’t as simple as figuring out which insurer has the lowest LCMs – but I can tell you that insurers Travelers, Hartford, Chubb, Guard, Liberty Mutual, and Hanover are among the best insurers with the lowest LCM’s.
And I represent them all!
The biggest factor that determines how to get to the lowest LCM is claims experience.
And when it comes to workers’ compensation, claims history drives much of the pricing calculation.
Claim history shows up in the LCM, it shows up your experience rating modifier.
You can see more about that here: What is a Workers’ Comp Minimum Experience Modifier
It will show up in any potential schedule debit or credit modifiers, and overall eligibility for the most competitive insurers.
It’s important to keep in mind that for an insurance company underwriter to offer their most competitive pricing the stars have to align just right to qualify.
The underwriter’s goal is to produce a price that’s competitive but also sufficient to cover the cost of potential claims and to make a profit. This is true of all insurance underwriting and pricing.
In addition to claims history, there are other factors that determine your pricing and what LCM factor an underwriter will use.
- experienced management.
- your premium must be sufficiently large to entice an underwriter to be very competitive.
- a well document loss control program to prevent and minimize claims.
- your classification codes.
Companies in hazardous operations such as carpentry or iron erection do not earn the credits as would a low-hazard operation such as a professional office.
Another big factor in determining how well you do in the pricing equation is your broker’s expertise and negotiation skill level.
If your broker can’t make a good case for why you deserve the most competitive premium from the market, you’re just not going to get it. And this is overlooked in a lot of discussions.
In my experience, the key to finding the best pricing in the market is to work with an experienced and expert broker who knows how to work the market and negotiate on your behalf to tailor the best workers’ compensation program.
This is not just fluff or bluster.
An entire process goes into obtaining a successful outcome, and it doesn’t happen by chance.
Unfortunately, too many insurance brokers in NY hope to throw submissions into the market like tossing chum off the back of the boat and hoping to hook the lowest price or biggest fish.
It doesn’t work that way.
Here’s the bottom line.
If you’re experiencing problems with your workers’ compensation insurance program – and that could be claims, frequent injuries, serious accidents, or just plain complacency by your broker, you’re not going to achieve best-in-class pricing.
I can help show you how to rehabilitate situations like that so you can move to better pricing models, and work with you on gaining a competitive advantage.
If claims aren’t a problem, but you just feel like your broker isn’t going to bat for you, then I can help as well.
I mentioned earlier that the workers’ compensation marketplace in New York is super competitive.
Underwriters from a lot of insurance companies are looking for good accounts to write, so if you’re looking to make a move, now may be a good time.
I represent all the top markets and programs so I know I can help you.
When we connect, I promise, no hardcore selling – just some dialogue to see if we can help you out.