As a native New Yorker now living in Florida, I often get asked what is the difference between New York Workers Compensation & Florida Workers Compensation? While the principles are so similar, in practice, they are so very different. Specifically, in how the legal differentiation affect the procuring of such policies.
Many States have modified how Class Code Rates are applied. Meaning, the rate defined by the State are not written in stone & can be deviated from if filed appropriately. The deviations can be North or South of the recommended rate of the State. Other States do not work this way. The rate is the rate period. Many so called champions of the people have argued that a State fixed rate appropriate so that the buying public will not allow a carrier to charge whatever rate they want. Florida is one of those States. However, while they may be well intentioned, the end result is not always positive for the consumer.
For example, if you ran an insurance company; & your actuaries determined that you can make money by writing Roofing Risks at a rate of $25 per $100 of payroll. However, you were in a State with a fixed rate (i.e. Florida) at $21 per $100 of payroll; you know with certainty, you will love 20% on every policy you write. So you make a business decision not to engage in writing that class of business. The contractor seeking coverage, is left without a Carrier to approach & they are forced to go to the State run program (Florida Workers Comp Joint Underwriting Association or FWCJUA) where they will be surcharged a minimum of 20% which has an end result that can be detrimental. The same scenario in a State that allows deviation, the Carrier will issue a policy at the rate they can make money on and the client can get affordable coverage.
These situations certainly do not encompass all the differences between the States & their respective laws. It was used to illustrate how a simple difference in approach can yield a drastically different result. As such, it is imperative that the buying public deals with qualified professions who can help them navigate the murky waters and deliver an insurance product that best fits their scenario.
Give us a call to discuss your specific scenario.
Rovner & Company, LLC
11098 Biscayne Blvd, Ste 100
Miami FL 33161
T.561.287.6279 Ext 101
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