Every commercial insurance premium has the same anatomy: Loss Cost Γ Loss Cost Multiplier (LCM) Γ Schedule Mods Γ Experience Mod. The loss cost is filed by a rating bureau (NCCI for workers comp; ISO for GL and commercial auto) and represents expected pure claims cost. The LCM is the carrier's filed multiplier covering their expenses + profit β typical small-business range is 1.20β1.50. Schedule mods add or subtract up to ~25% based on operations. Same loss cost Γ different LCM = why two carriers quote you very different prices for the same risk. Every number above is filed publicly with your state's DOI via SERFF and is searchable at filingaccess.serff.com.
Commercial insurance pricing looks opaque from the outside β but it is built from a small set of publicly-filed inputs that anyone can look up. This guide walks the full pipeline: how loss costs are actuarially derived from claims data, how carriers add their LCM on top, why the same business gets quoted three different prices, and how to read an actual rate filing on SERFF. Every claim here is anchored to a primary source (NCCI / ISO / NAIC / SERFF) β no blog estimates, no aggregated industry summaries. Sources: National Council on Compensation Insurance (NCCI); Insurance Services Office (ISO); National Association of Insurance Commissioners (NAIC); state Departments of Insurance via SERFF Filing Access (filingaccess.serff.com).
loss cost + LCM + schedule
typical small-business carriers
credit or debit, filed
require DOI rate-filing
How insurance rates are actually set
Commercial insurance rates follow the same five-step pipeline whether you're buying workers comp, general liability, or commercial auto. Each step produces a number that is filed publicly with your state's Department of Insurance:
- Claims data aggregation. Rating bureaus (NCCI for workers comp; ISO for most GL and commercial auto) collect historical claims data from every licensed carrier, by class code and state. NCCI alone aggregates ~80% of US workers comp claims. ISO aggregates billions in GL premium across reporting carriers. This is the raw fuel.
- Actuarial trending + development. Rating-bureau actuaries take historical losses and apply loss-development factors (recognizing that recent claims aren't fully reported yet) plus trend factors (medical inflation, wage growth, jury verdict drift). The output is an estimate of future expected pure loss per unit of exposure (per $100 payroll for WC; per $1,000 sales for GL retail; per vehicle-year for commercial auto).
- Class-code loss cost filing. NCCI / ISO files the resulting loss costs with each state's DOI. Each class code (e.g. NCCI 5645 = Carpentry residential β€ 3 stories; ISO 41679 = Restaurants) gets its own filed loss cost. This is what we mean by "filed rates" β the SERFF system stores every filing with a tracking number, effective date, and supporting actuarial memorandum.
- Carrier LCM + schedule rating. Each carrier files its own multiplier on top of the bureau loss cost. The LCM (Loss Cost Multiplier) covers the carrier's overhead, profit target, reinsurance cost, and growth strategy. Typical small- business LCMs land between 1.20 and 1.50, but they vary meaningfully by carrier β this is most of why two carriers quote differently. Carriers also file schedule-rating tables that let underwriters apply Β±25% credits or debits based on operations (loss control, safety programs, premises features).
- Your quote. When a quote runs, the carrier looks up the loss cost (by class code + state), multiplies by their LCM, applies your experience modifier (claims-history-derived multiplier β applies to WC and some GL/auto programs), applies schedule credits or debits, and produces the final premium. Different carriers = different LCMs = different schedule judgments = different prices for the same risk.
Loss costs vs. your premium
These two terms get conflated in marketing copy but they are precise actuarial concepts. The difference is the entire reason commercial insurance shopping is worth doing.
| Loss Cost | Your Premium | |
|---|---|---|
| What it represents | Expected pure claims cost per unit of exposure | What you actually pay the carrier |
| Who files it | Rating bureau (NCCI / ISO) | Each carrier files their own rate manual |
| Does it include carrier expenses? | No β pure loss only | Yes β overhead, commissions, profit, reinsurance |
| Does it vary by carrier? | No β it's the same for all carriers in that state and class | Yes β LCM + schedule + Mod vary per carrier |
| Where you find it | SERFF Filing Access (state DOI) β NCCI / ISO filings | Quote from carrier, or carrier's filed rate manual on SERFF |
| How to use it as a buyer | Sanity-check what's "actuarially reasonable" for your class | Compare across carriers β same loss cost, different prices = LCM gap |
The math: in workers comp, loss cost is filed per $100 of payroll. For NCCI Class 5645 (Carpentry residential β€ 3 stories) the proposed Colorado advisory loss cost effective January 2026 is $1.99 per $100 payroll. A contractor with $50,000 in payroll has an expected pure loss of $50,000 Γ· $100 Γ $1.99 = ~$995/year. The carrier then applies their LCM. With a typical LCM of 1.20β1.50, the actual workers comp premium falls in the $1,195β$1,495/year range. Larger payroll scales proportionally. Same math applies to GL (with per-$1,000-sales loss costs) and commercial auto (with per-vehicle loss costs).
Compare carrier LCMs on a real quote
Same loss cost, different LCMs — 5-min quote across 10+ carriers.
See your numbers from real filings
Anchored to state DOI rate filings, not industry averages.
Why two carriers quote you differently (the LCM)
When you shop the same business across three carriers, you'll often get three meaningfully different prices. The loss cost is the same for all three (NCCI / ISO files one number per class per state), so the gap comes from three other layers β all filed publicly.
| Source of difference | Typical range | Why it varies |
|---|---|---|
| LCM (Loss Cost Multiplier) | 1.10 lean direct writers β 1.65+ specialty admitted | Carrier expense ratio + profit target + reinsurance cost + growth strategy + distribution channel |
| Schedule rating | β25% (best in class) to +25% (poor operations) | Underwriter judgment on premises, loss control, safety programs, management experience |
| Experience Modifier (Mod) | 0.75 (great claims history) to 1.50+ (poor) | NCCI-published for WC; calculated from your last 3 years of claims relative to class |
| Class assignment | Same class across carriers in theory; in practice, judgment differs | Mixed operations get classed differently by underwriters β same business β different primary class β different loss cost |
| Minimum premium | $500 to $2,500+ filed minimums | Each carrier files its own minimum-premium rule; below that floor, math doesn't apply |
Why LCMs vary so much: a carrier's LCM bundles its operating costs (claims handling, underwriting, broker commissions, advertising, reinsurance, capital costs, target return). A direct-writer with no agents has a lower expense load than a specialty admitted carrier writing complex risks through an independent agency channel. Both file their LCMs with the state DOI; the spread is visible if you mine SERFF filings (which is the moat behind the rest of this site).
How to read a rate filing
Every rate filing on SERFF follows the same anatomy. Once you know what to look for, you can read any carrier's filing in ~10 minutes and pull out the loss costs, LCMs, and effective dates that actually drive prices in your state.
- Filing cover sheet (Form A). Filing tracking number, carrier NAIC code, line of business (e.g. "17.0019 Commercial Auto"), filing type (rate revision, rule change, forms revision), proposed effective date, % impact summary, and the disposition (approved / pending / disapproved). The cover sheet alone tells you if the carrier is raising or lowering rates and by how much.
- A-Sheets (rate pages). The actual rate tables being filed. For workers comp this is the loss-cost table by class code. For commercial auto this is the base-rate table by territory and vehicle type. For GL it's per-$1,000-sales rates by class. A-Sheets are the meat β the actuarial numbers that determine your premium before the LCM is applied.
- Rate manual pages. The carrier's filed rules for how to combine the rates: territory definitions, schedule- rating credit/debit tables, minimum premiums, package modification factors, package credit factors. Rate manuals show what an underwriter is filed to do β and crucially, what they cannot do off-filing.
- Supporting actuarial memorandum. The actuary's written justification for the proposed rates. Includes historical loss ratios, trend assumptions, loss development factors, target combined ratio. For a savvy buyer or competitor this is the most informative document β it shows the carrier's actual underlying loss expectations and their margin target.
- Disposition (state DOI action). The state's response: approval letter, request for additional information, modification order, disapproval. Some states (CA) review every filing rigorously; others (TX prior approval for auto; file-and-use for many lines) approve on schedule unless flagged. The disposition is what makes a filing live.
SERFF Filing Access is the public-facing portal: filingaccess.serff.com. Pick your state, line of business, and effective-date range. Each filing has a tracking number (e.g. NCCI-134620513 for the Colorado NCCI 2026 proposed loss-cost filing) that can be cited as a primary source.
Filed rates: what state regulators actually approve
Insurers can't charge whatever they want for commercial coverage β they must file their rates publicly with each state's Department of Insurance (DOI). Those filings are primary-source, government-held pricing records available via SERFF Filing Access (filingaccess.serff.com). The filed loss cost is the most authoritative starting point for "how much does this cost" β more authoritative than any blog estimate, including ours when not anchored to a filing.
Here is a worked example using the actual NCCI proposed loss-cost filing for Colorado, effective January 1, 2026. NCCI Class Code 5645 = Carpentry — Construction of Residential Dwellings Not Exceeding Three Stories in Height. Same filing pattern applies to every state and every NCCI class — only the loss-cost number and effective date change.
What that means in real dollars β using GBC's real funnel as the example basis: across 61 real (NAICS 23xxxx) quote requests submitted to Get Business Coverage (k-anonymity n β₯ 30 met; excludes solo "no employees" submissions), the most-common annual payroll bracket is $1 - $50K (23 of 61 requests). Bracket midpoint = $25,000 payroll. Applying the filed loss cost above: $25,000 Γ· $100 Γ $1.99 = ~$498/year expected pure loss. Carriers apply their own Loss Cost Multiplier (LCM) on top β typical small-business LCM range is 1.20β1.50 β yielding an actual workers-comp premium range of $597–$746/year with a midpoint of ~$672/year.
Number-to-number triangulation: the filed loss cost above Γ GBC's real residential carpentry contractor payroll distribution Γ typical LCM = GBC's expected median workers-comp premium for a residential carpentry contractor: ~$672/year (range $597–$746/yr). The regulator filed the loss cost; GBC's funnel provides the real payroll basis; the arithmetic between them is on this page in full. That dollar figure is paired number-to-number with the filed rate β not blended, not aggregated from a competitor's blog.
For a commercial auto example, here is the Texas Automobile Insurance Plan Association (TAIPA) 2025 base-rate filing. Important caveat: TAIPA is the residual market β voluntary-market quotes from standard carriers run materially lower. This is included to show what a residual-market commercial auto filing looks like, not as a typical voluntary-market rate.
Texas TAIPA range across 52 territories for this filing: $141/yr (rural T62) to $561/yr (urban T1) per Commissioner Order 2025-9419.
How to read filed rates: the filed value is the advisory loss cost (NCCI for WC) or manual base rate (carrier filings for GL / Auto) β what carriers and rating organizations submit to regulators as the actuarial starting point. The actual quote you receive applies a Loss Cost Multiplier (LCM) the carrier filed separately, plus rating factors for territory, payroll, experience modifier (Mod), and schedule credits or debits. Same loss cost Γ different LCM = why two carriers quote you very different prices for the same business.
Honest note on what we triangulate and what we don't: the GBC triangulation above uses our real funnel's modal payroll bracket Γ the filed loss cost Γ a typical LCM range β that's the expected actual premium derived from primary-source data, not a measured quote median. We don't currently capture carrier-quoted premiums on our leads (the partner integrations track acceptance status, not pricing), so we cannot yet say "the actual median of N quotes was $X." We are building a Quote-Outcome capture layer specifically to add that measured median; until it ships, the figure above is the expected premium implied by the filing, paired with the real GBC payroll distribution. See our methodology page for the full breakdown of what we measure today and what we are adding.
Frequently Asked Questions
What's the difference between a loss cost and a premium?
A loss cost is the expected pure claims cost per unit of exposure (per $100 payroll for workers comp; per $1,000 sales for GL; per vehicle for commercial auto), filed by a rating bureau (NCCI / ISO). It does NOT include carrier expenses, commissions, profit, or your specific operations factors. A premium is what you actually pay β loss cost Γ the carrier's filed LCM Γ schedule credits/debits Γ experience modifier. Same loss cost across carriers β different premiums because LCMs and schedule judgments vary.
What is an LCM (Loss Cost Multiplier)?
The Loss Cost Multiplier is a carrier-specific multiplier filed on top of the bureau loss cost. It covers the carrier's expense load β claims handling, underwriting, broker commissions, advertising, reinsurance, capital costs β plus their target profit. Typical small-business LCMs land between 1.20 and 1.50. Direct writers with leaner operations tend to file lower LCMs (~1.10β1.30); specialty admitted carriers in the independent-agency channel file higher (~1.40β1.65). Carriers file their LCMs publicly with state DOIs via SERFF.
Why do two carriers give me different prices for the same business?
Same loss cost (filed by NCCI / ISO, identical for all carriers in that state + class), but different LCMs (each carrier files their own), different schedule rating judgments (each underwriter applies their own credits/debits within the carrier's filed schedule), different class assignments (mixed operations can be classed differently), and different minimum premiums. The combined effect is meaningful β easily 30β60% spread between the highest and lowest credible quote on the same risk.
Where can I look up an actual rate filing?
SERFF Filing Access is the public portal β pick your state, line of business, and effective-date range. Each filing has a tracking number (e.g. NCCI-134620513 for the Colorado NCCI 2026 proposed loss-cost filing) that serves as a citable primary source. Some states have additional searchable portals (CA OASIS, TX TDI rate-filing search, FL OIR I-Site). State DOIs also publish individual filings as PDFs.
Are filed rates the final price I'll pay?
No. Filed rates (loss cost + LCM) are the starting point. Your final premium also includes your experience modifier (NCCI-published for workers comp β your last 3 years of claims relative to class), schedule rating credits or debits (Β±25% typical), package modification factors, and any state-specific surcharges or assessments. A filed-rate citation tells you what's actuarially reasonable for your class in your state β the actual quote will be higher or lower depending on your specifics.
What's the difference between NCCI and ISO?
Both are rating bureaus that file loss costs + rating rules with state DOIs, but they cover different lines. NCCI covers workers compensation in 38 states + DC (independent state bureaus handle the rest β WCIRB California, NYCIRB New York, etc.). ISO (now part of Verisk) covers most commercial lines other than WC β general liability, commercial auto, commercial property, businessowners. Some lines have multiple bureaus competing or coexisting. Carriers typically file their own LCMs on top of whichever bureau covers the line.
How often do filed rates change?
Bureau loss costs (NCCI / ISO) typically file annually per state with proposed effective dates 6β12 months out. Carrier LCMs file as needed β some carriers file a couple of times per year if market conditions change; others go years between filings. State DOIs publish proposed and approved filings throughout the year. Our methodology page covers how Get Business Coverage tracks new filings as they hit SERFF.
Can carriers charge whatever they want?
No β in all 50 states + DC, commercial insurance carriers must file their rates with the state DOI. Different states use different approval regimes: prior approval (state must approve before use β California, New Jersey), file-and-use (file, then use immediately unless state objects within a window β most states for most lines), use-and-file (start using, then file shortly after β limited cases), and no-file (very rare; specialty lines only). In every regime, off-filing rates are illegal and recoverable as overcharges.
Quick glossary β rate-mechanics terms
- Loss Cost
- Expected pure claims cost per unit of exposure (per $100 payroll for WC; per $1,000 sales for GL; per vehicle for commercial auto). Filed by NCCI / ISO with state DOIs. Same for all carriers in a state + class.
- Loss Cost Multiplier (LCM)
- Carrier-specific multiplier filed on top of loss cost. Covers expenses, commissions, reinsurance, profit, capital. Typical small-business LCM range: 1.20β1.50. Direct writers lean low; specialty admitted carriers lean high.
- Manual Premium
- Loss Cost Γ LCM Γ Exposure (before mods + schedule rating). The starting-point premium.
- Experience Modifier (Mod / EMR)
- Multiplier applied to manual premium based on YOUR last 3 years of claims relative to industry expected for your class. NCCI publishes WC mods. 1.00 = average; 0.75 = great history; 1.50+ = poor.
- Schedule Rating
- Carrier-filed underwriter discretion β typically Β±25% β applied to manual premium based on operations features (premises, loss control, management experience). Most carriers file schedule-rating tables that cap the maximum credit and debit.
- SERFF
- System for Electronic Rate and Form Filing. National platform where carriers + rating bureaus submit rate filings to state DOIs. Public-facing portal: filingaccess.serff.com.
- NCCI
- National Council on Compensation Insurance. Rating bureau for workers comp in 38 states + DC. Files class-code loss costs + experience modifications + payroll-classification rules. Independent state bureaus (e.g. WCIRB California) handle the rest.
- ISO
- Insurance Services Office (now part of Verisk). Rating bureau for most commercial lines other than workers comp β GL, commercial auto, commercial property. Files class-code loss costs, policy forms (CGL CG 00 01), and rating rules.
- Rate Filing
- The packet a carrier or bureau submits to a state DOI proposing new rates / rules / forms. Contains the cover sheet (Form A), rate pages (A-Sheets), rate manual changes, and actuarial memorandum. Stored on SERFF.
- Effective Date
- The date a filed rate change takes effect for new and renewal policies. Set by carrier/bureau and approved (or modified) by the DOI. Filings often have different effective dates for new business vs. renewals.
- Disposition
- The state DOI's official action on a filing β approved, modified, disapproved, withdrawn. Different states use different approval regimes (prior approval, file-and-use, use-and-file, no file).
- Class Code
- Numeric identifier for an operating class (e.g. NCCI 5645 = Carpentry residential β€ 3 stories; ISO 41679 = Restaurants). Drives loss-cost lookup. Misclassification = wrong premium.