Have you ever noticed a scheduled credit on your policy? Ever wonder why it’s there?
Often times brokers are able to negotiate these on your behalf, but sometimes the scheduled credits are adjusted based on the experience MOD changes.
It’s 2017 and you’re at the last year of your debit experience MOD of a 1.25. Your current WC policy for that year has a scheduled credit of .80, easing some of the pain of your current debit MOD rating. Your renewal policy comes in for 2018 with a new MOD of .78 and low and behold your scheduled credit is now a scheduled debit of 1.10. What gives? Virtually all of the premium savings you were expecting is gone!
You ask your broker or you are the broker and you ask the carrier. The story you’re given goes something like this, “we need to get the x premium and with the MOD dropping we can’t give the same scheduled credit.” Sounds like an unfortunate, albeit acceptable explanation.
Scheduled credits weren’t designed to operate this way even though brokers and clients see this all the time. If you’ve seen the scheduled credit take a turn for the worse, talk to us today.
In some states, like Arizona, the credits can be tied directly to loss ratios. In others, like Virginia, they’re based on certain risk characteristics, all of which you are entitled to review and even change mid-policy term!
You can’t manage what you don’t understand!