Workers compensation insurance in Oklahoma has recently undergone some big changes. In 2013, the workers comp court system switched from a traditional court system to an administrative system, modeling itself after the majority of the other states. This has led to many additional reforms that have increased the efficiency of the workers comp insurance market and court system.
If you have been purchasing workers comp insurance for the past decade, you might have seen your premiums drop to half of what they were in 2013 or 2014. As of 2021, our rates are still declining by an average of about 10% each year as a result from these changes. While we wouldn’t call it cheap, workers compensation insurance is certainly more affordable than ever.
Our goal with this post is to give you some practical advice on how to leverage these systemic changes to Oklahoma’s workers compensation industry, including how to stand out to underwriters and ultimately get the best rate possible. Here are our tips:
1. Shop your expanded options for the most competitive rates.
A flood of new workers compensation insurance carriers have entered Oklahoma as a result of the reforms. Additionally, existing insurance companies in the state are expanding the industries they provide coverage on and making workers compensation a higher priority in their business plans.
Companies that would only write light class codes, such as office work, are now writing construction classifications at competitive rates. In other words, businesses that were difficult and expensive to insure a couple years ago can now get multiple competitive quotes.
We suggest that you review these expanded options and see if an insurance carrier is available that hasn't been in the past. Just because an insurance carrier wouldn't quote you a couple years ago doesn’t mean they won't quote you today.
2. Try CompSource if you are in a high-rate class code.
In the past, CompSource gained the reputation of being the state's insurer of last resort. The perception was that you should only go to CompSource when the private market would not quote, and would likely receive a quote that was significantly higher than what you were already paying. But the reality is this is no longer the case.
For businesses in higher rate industries, CompSource is more competitive than ever. In addition to competitive rates, its loss control services, claims services, and ease of doing business rival the best insurance companies in the world.
CompSource has also been expanding its other capabilities, such as the ability to write in states other than Oklahoma.
3. Be ready to pitch why your company is a safer workplace than your competitors.
A large part of getting the best rate available is justifying to the underwriter why you are worthy of the discount. Similar to a loan, the best applicants get the best rates.
Being prepared to explain why you are a better risk than the average company in your classification is critical. Do you have newer equipment? Is there a proven history of exceeding required safety or operational benchmarks? Make it easy for underwriters to give you discounts by providing them with a pitch as to why they will pay out fewer claims than they would insuring anyone else.
4. Leverage your workers comp policy to get a better deal on other, less profitable, types of insurance.
When you are negotiating your workers compensation premium rates in Oklahoma, it is often better to negotiate on the entire insurance package. That’s because workers compensation is one of the most desirable and profitable lines of business for insurance companies across the state. So, you may be able to parlay that profit into other savings on the larger policy.
Have your broker ask the underwriter if there are anycredits available on the other policies if you paired them with workers comp. You might have gotten a laugh out of the underwriter a few years ago, but now this is a popular method for securing additional rate reductions.
For example, commercial property and commercial auto are two types of insurance in Oklahoma that are unprofitable and increasing in cost. If your insurance company can secure the most desirable line of insurance (workers compensation), they can likely offer you a better deal on the other policies.
5. Know your experience modifier and keep it as low as possible.
For larger businesses or companies in higher risk industries (e.g. heavy manufacturing, heavy construction, etc.), managing your experience modifier can provide you with more cost savings than anything else you could do.
Looking for more information on this topic? Check out our post, "Workers Compensation Experience Modifiers: What You Need To Know."
Sometimes it is better to choose an insurance company that offers specific services to help you manage your experience modifier, even if that means paying slightly more. Because over the long-term, maintaining a low mod will save you significantly more than choosing a cheaper insurance company that can’t help you with your experience modifier.
Right now, workers compensation is one of the most competitive and desirable types of policies for insurance carriers. With the right knowledge and the right team, you can take advantage of the competitive marketplace to not only lower your workers compensation premiums, but possibly your other insurance policies. If you are looking for help getting the best terms or developing a long-term strategy on your workers compensation insurance, let us know!