Experience Rating Definition
Experience Rating is a measurement the insurance industry uses to evaluate the insurance risk of an employer based on their experience. Experience rating is commonly a factor in worker’s compensation. For example, workers’ compensation premiums are calculated using an experience rating, based on the employer’s claim history and industry classification.
Experience rating in the insurance industry rewards employers with an excellent claim history, and provides employers with a history of experience with an incentive to improve their loss prevention.
A Look at Experience Rating Modification