Experience Modification Rate (EMR)
The experience modification rate is a multiplier applied to workers compensation premiums that reflects the employer's historical loss experience compared to the industry average.
The experience modification rate, commonly called the EMR or mod rate, is a factor used in workers compensation insurance pricing that adjusts the premium based on the employer's claims history relative to the average for similar employers in the same industry and state. An EMR of 1.0 represents the industry average. An EMR below 1.0 indicates better-than-average loss experience and results in a premium credit. An EMR above 1.0 indicates worse-than-average experience and results in a premium surcharge.
For apartment properties, the EMR reflects the claims history of the maintenance, leasing, and management staff employed at the property. Workers compensation claims from on-the-job injuries such as falls, cuts, back injuries, and chemical exposure all factor into the EMR calculation. The modification is based on a three-year rolling window of claims data, with a one-year lag. This means that a bad year of claims will affect the EMR for several years afterward.
Managing the EMR requires a proactive approach to workplace safety, including proper training for maintenance staff on equipment use and chemical handling, providing appropriate personal protective equipment, maintaining a clean and hazard-free work environment, and implementing a return-to-work program that helps injured employees resume modified duties as soon as medically appropriate. A lower EMR directly reduces workers compensation premiums and can also be an indicator of overall property management quality.