NCCI Just Confirmed: Ten $5,000 Claims Wreck Your Mod Worse Than One $50,000 Claim

QUICK ANSWER

NCCI's Experience Rating Plan weights claim FREQUENCY more heavily than SEVERITY. Ten separate $5,000 claims raise your experience modification rate (mod) more than a single $50,000 claim — because each small claim falls under your state's split point and hits at full "primary loss" weight. Since November 2023, NCCI uses state-specific split points ranging from roughly $9,500 (Oregon) to $38,000 (Louisiana), and NCCI's own audit reviews suggest about 1 in 4 mod worksheets contains an error that inflates the mod — and the premium.

The counterintuitive truth most business owners get backwards

Almost every business owner assumes one large claim is the biggest threat to their workers' compensation premium. The math says the opposite. NCCI's Experience Rating Plan is intentionally designed to penalize claim frequency more harshly than claim severity.

Here's why: a business with many small claims displays a pattern of unsafe operations, and statistically it is more likely to produce a future catastrophic claim. A single isolated severe claim is treated as more of a random event. So NCCI's formula gives greater weight to how often you have claims than to how expensive any one of them is.

The example that proves it

Ten claims of $5,000 each ($50,000 total) will damage your mod more than one claim of $50,000.

●      The ten small claims each fall below the split point, so each one hits the primary layer at full weight.

●      The single $50,000 claim has most of its cost in the excess layer — where weight is heavily reduced.

Same dollars of loss. Very different mod. Very different premium — for years, because the mod uses a rolling three-year window.

What changed: state-specific split points

The "split point" is the dollar line that divides each claim into primary losses (below the line, full weight) and excess losses (above the line, reduced weight). Before November 1, 2023, every NCCI state used the same $18,500 split point. Now each state sets its own.

As of 2026, split points range from approximately $9,500 in Oregon to $38,000 in Louisiana, with most NCCI states somewhere in between. If you operate in multiple states, the exact same claim can be weighted differently in each one — which means you must know the split point that applies in your state to know which claims will hurt you most.

The kicker: 1 in 4 worksheets is wrong

You are legally entitled to a copy of your mod worksheet every year. Most business owners never request it. That is a costly mistake: NCCI's own audit reviews suggest roughly 1 in 4 worksheets contains an error that, when corrected, lowers the mod and can trigger a premium refund.

The most common errors that inflate a mod:

●      Claims still showing original (stale) reserve values long after they should have been reduced

●      Missing subrogation recoveries that should have credited your experience

●      Claims assigned to the wrong employer entirely

●      Payroll not corrected after a final audit

When NCCI confirms an error, the mod is revised retroactively — and your carrier issues a premium refund.

5 moves that actually lower your mod

1.              Pull your mod worksheet. You're entitled to it annually — request it and read it line by line.

2.              Audit open claims and push stale reserves to close. Open claims carry their full reserve into your mod.

3.              Report every claim within 24 hours. Faster reporting lowers ultimate claim cost, which lowers your mod.

4.              Run a return-to-work program. Getting employees back on modified duty cuts lost-time costs that hit hardest.

5.              Dispute errors. If the worksheet is wrong, file a formal dispute — NCCI revises retroactively and refunds overpaid premium.

How this hits your premium

Your mod is a direct multiplier on your workers' comp premium. A mod of 1.00 is average. Every 0.10 above 1.00 is roughly a 10% premium surcharge on your manual rate; every 0.10 below is a discount. And in construction, staffing, and many industrial trades, a mod at or below 1.00 is often required just to bid work on platforms like ISNetworld, Avetta, and Veriforce. A frequency problem you didn't understand — or a worksheet error you never checked — can quietly cost you both premium dollars and contracts.

Frequently asked questions

Do ten small claims really hurt more than one large claim?

Yes. Claims below your state's split point are counted as primary losses at full weight. Ten small claims produce ten full-weight primary hits; one large claim pushes most of its cost into the reduced-weight excess layer.

What is the split point in my state?

It varies. As of 2026, state-specific split points range from roughly $9,500 (Oregon) to $38,000 (Louisiana). Your carrier or broker can confirm the exact figure that applies to your policy.

How do I know if my mod worksheet has an error?

Request the worksheet and check claim reserves, subrogation credits, claim assignment, and audited payroll. About 1 in 4 contains an error. A free broker review is the fastest way to catch one.

Can I get money back if there's a mistake?

Often, yes. When NCCI confirms an error, it revises the mod retroactively and your carrier issues a premium refund.

The bottom line

Frequency — not severity — drives your workers' comp mod, and a worksheet error you've never checked could be inflating your premium right now. Akker, LLC runs free mod worksheet reviews for staffing, film, and production employers. We find the errors carriers won't flag and help you build the loss-control habits that lower your mod over time.

Contact Stan Shkilnyi — stan@akkerins.com  |  912-247-3075  |  akkerins.com