The X-Mod Factor

Orange Insurance

Businesses may pay unfairly inflated insurance premiums because they operate in highly populated counties like Los Angeles, Riverside or Orange. Insurance rates increase based on a rating called an experience modification factor, or X-Mod. The X-Mod rating is a comparison of how many claims a business files compared to other similar industries in the area and is prone to errors resulting from faulty input data.

Regular Review Uncovers Errors

An insurance company experienced in business claims can analyze a company’s X-Mod rating to determine if it is paying too high an insurance premium. By performing regular checkups, the provider may uncover errors about:

  • Demographic information
  • Claims filed
  • Loss control
  • Miscalculation of X-Mod formulas

The result of finding any errors and fixing them is lowering the X-Mod rating resulting in a reduction in the business’ monthly premium. In some cases, corrected X-Mod scores may prompt insurance companies to refund part of the overpaid premiums retroactively.

Every Penny Counts

For businesses to remain profitable, it can be as important to reduce expenses as it is to increase income. Since more errors tend to occur in counties with larger populations like Los Angeles, Riverside and Orange, insurance spending in these areas can be artificially high. Having an X-Factor rating reviewed and corrected if necessary is a straightforward way for companies to stop one potentially wasteful expense.