SYSTEM AND METHOD FOR THE ASSESSMENT, PRICING, AND PROVISIONING OF DISTANCE-BASED VEHICLE INSURANCE

• US 20070288270A1
• Filed: 04/23/2007
• Published: 12/13/2007
• Est. Priority Date: 10/29/2004
• Status: Active Grant

• Current Assignee: State Farm Mutual Automobile Insurance Company (State Farm)
• Original Assignee: Milemeter, Inc.
• Inventors: Gay, Chris, Duncan, Leonard, Fellows, Jeffrey, McKinney, John
• Granted Patent: US 7,987,103 B2
• Time in Patent Office: Days
• US Class Current: 705/4
• CPC Class Codes: G06Q 10/10 Office automation; Time management
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G07G 1/12 electronically operated digital data processing aspects G06Q20/00

Abstract

A method of providing vehicle insurance is disclosed. Determining a number of unexpired units distance under an existing insurance policy, the existing policy being defined in part by coverage for a predetermined number of units distance for a specified vehicle is disclosed. Assessing a premium per unit distance for a new policy, and providing coverage under the new policy for the unexpired units distance under the existing policy in exchange for receiving a payment comprising the difference between the premium per unit distance for the new policy and a premium per unit distance for the existing policy multiplied by the number of unexpired units distance is disclosed.

Claims

1. A method of providing vehicle insurance comprising:

determining a number of unexpired units distance under an existing insurance policy, the existing policy being defined in part by coverage for a predetermined number of units distance for a specified vehicle;

assessing a premium per unit distance for a new policy; and

providing coverage under the new policy for the unexpired units distance under the existing policy in exchange for receiving a payment comprising the difference between the premium per unit distance for the new policy and a premium per unit distance for the existing policy multiplied by the number of unexpired units distance.

2. The method of claim 1, wherein the unexpired units distance are determined based on a number of units distance whose premium was paid under the existing policy but which have not been driven by the specified vehicle.

3. The method of claim 2, wherein the unexpired units distance are also determined based on a predetermined policy expiration time having not yet lapsed.

4. The method of claim 1, wherein the premium is based on a actuarial criteria, the actuarial criteria comprising vehicle information, driver information, and garaging location.

5. The method of claim 1, wherein the specified vehicle covered by the current policy is different than a vehicle covered by the new policy.

6. The method of claim 1, wherein the specified vehicle covered by the current policy is also covered b the new policy.

7. The method of claim 1, wherein determining a number of unexpired units distance under an existing insurance policy further comprises obtaining an odometer reading of the specified vehicle corresponding to the existing insurance policy.

8. The method of claim 7, wherein the odometer reading is verified by an official state document corresponding to one of a sale, trade-in, or total loss of the specified vehicle corresponding to the existing insurance policy.

9. The method of claim 1, wherein determining a number of unexpired units distance under an existing insurance policy is performed without any in-vehicle monitoring device other than an odometer.

13. The method of claim 1, wherein the unexpired units distance are determined based on a number of units distance whose premium was paid under the first policy.

14. The method of claim 13, wherein the unexpired units distance may only be determined before lapse of the policy expiration date.

10. A method of providing distance-based vehicle insurance, comprising:

receiving from a customer a first odometer reading of a vehicle to be insured;

insuring the vehicle under a first insurance policy defined by coverage for a preselected number of units distance from the first odometer reading or lapse of a policy expiration date, a premium for the first insurance policy being defined as a cost per unit distance of coverage;

determining a number of unexpired units distance under the first insurance policy;

assessing a premium per unit distance for a second policy; and

providing insurance coverage under the second policy for the unexpired units distance under the first policy in exchange for receiving a payment comprising the difference between the premium per unit distance for the new policy and a premium per unit distance for the second policy multiplied by the number of unexpired units distance.

11. The method of claim 10, wherein the second insurance policy covers a vehicle different than that covered by the first policy.

12. The method of claim 10, wherein the second insurance policy covers the same vehicle as the first policy.

15. The method of claim 10, wherein determining a number of unexpired units distance under the first insurance policy further comprises obtaining an odometer reading of the specified vehicle corresponding to the first insurance policy.

16. The method of claim 15, wherein the odometer reading is verified by an official state document corresponding to one of a sale, trade-in, or total loss of the specified vehicle corresponding to the existing insurance policy.

17. A system for administering a distance based-insurance program, the system comprising:

a processor configured to determine a number of unexpired units distance under an existing insurance policy, the existing policy being defined in part by coverage for a predetermined number of units distance for a specified vehicle, and to calculate a total premium for a new policy; and

a user interface for receiving payment from customer of a premium of a new insurance policy;

wherein the total premium for the new policy includes coverage under the new policy for the unexpired units distance under the existing policy, and the total premium for the new policy includes the difference between a premium per unit distance for the new policy and a premium per unit distance for the existing policy multiplied by the number of unexpired units distance.

18. The system of claim 17 further comprising means for receiving an odometer reading from a trusted source for use in determining a number of unexpired units distance under an existing insurance policy.

19. The system of claim 18, further comprising a relational database configured to store odometer readings.

20. The system of claim 17, wherein the total premium for the new policy is calculated to reflect coverage for a different vehicle under the new policy than under the first policy.