Workers' Comp & Auto · Insurance Term
Experience Modification Rate (EMR)
Definition
The experience modification rate (EMR, or mod) is a number that adjusts your workers' compensation premium based on your past claims compared with similar businesses. A mod of 1.00 is average; below 1.00 lowers the premium and above 1.00 raises it. Contractors are often asked for their EMR.
In Plain English
A rating organization calculates the mod from several years of payroll and claims, usually leaving out the most recent year. Frequent small claims tend to hurt a mod more than one large claim, because the formula weighs how often claims happen.
Your workers' comp premium is roughly payroll (per $100) times the Classification Code rate, then adjusted by the mod and other factors. A premium audit after the policy year confirms actual payroll.
Property owners mostly see EMRs when hiring contractors. A high mod can signal safety problems, so many owners set a maximum in contractor requirements. Your own mod depends on accurate claims reporting, so review your loss run each year.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: A hotel's workers' comp premium before the mod is $50,000. With a 0.85 mod, the premium is about $42,500. If the mod rises to 1.20 after several injuries, the premium could be about $60,000 before other adjustments.
Why It Matters for Texas Property Owners
Most private Texas employers may choose not to carry workers' comp. Non-subscribers have no workers' comp policy and so no EMR, which can come up when a contract or general contractor asks for one. Ask how your contracts treat non-subscriber vendors.
What to Watch For
- Check your mod worksheet each year for errors in payroll or claims.
- Report claims promptly and help close them so reserves stay accurate.
- Set a maximum EMR in contractor requirements and ask for proof.
- Use return-to-work programs, which can reduce claim costs.
Common Questions
What's a good EMR?
1.00 is average for your industry. Below 1.00 is better than average and above 1.00 is worse. Many contracts ask for 1.00 or lower.
How long does a bad claim affect my mod?
Typically for as long as it falls within the experience period, which commonly covers about three years of history. The rules depend on the state and rating organization.
Sources
Last updated October 14, 2026 · Primesure editorial team · How We Write