Usage-based insurance cost determination system and method
First Claim
1. A method of determining a distance-based premium for vehicle insurance for a customer, comprising:
- inputting into a user terminal an actual or estimated customer distance driven for the customer over a designated time interval;
transmitting from the user terminal to a computational platform the actual or estimated customer distance driven for the customer over the designated time interval;
determining in the computational platform, a rate per distance unit factor for the customer based upon a plurality of criteria, wherein the rate per distance unit factor over an initial driving range is greater than the rate per distance unit factor over a subsequent driving range;
executing in the computational platform a per distance unit based premium calculation based upon the customer'"'"'s determined rate per distance unit factor; and
determining, in the computational platform, a distance-based premium for the customer using the per distance unit based premium calculation.
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Accused Products
Abstract
A system and method for calculating and applying insurance costs. For vehicle insurance under one embodiment of the present invention, insurance costs are calculated on a per-mile basis in a nonlinear fashion, assigning different levels of risk based upon the distance driven by a customer. In one embodiment of the present invention, the first miles or kilometers driven by a customer are assigned a greater level of risk than later-driven miles or kilometers. The present invention provides an actuarial method that more closely conforms the cost of insurance for a particular vehicle to its annual mileage by creating a Rate Per Mile Factor (RMF), where the RMF is expressed as a function of annual mileage.
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Citations
18 Claims
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1. A method of determining a distance-based premium for vehicle insurance for a customer, comprising:
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inputting into a user terminal an actual or estimated customer distance driven for the customer over a designated time interval; transmitting from the user terminal to a computational platform the actual or estimated customer distance driven for the customer over the designated time interval; determining in the computational platform, a rate per distance unit factor for the customer based upon a plurality of criteria, wherein the rate per distance unit factor over an initial driving range is greater than the rate per distance unit factor over a subsequent driving range; executing in the computational platform a per distance unit based premium calculation based upon the customer'"'"'s determined rate per distance unit factor; and determining, in the computational platform, a distance-based premium for the customer using the per distance unit based premium calculation. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8)
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9. An electronic device, comprising:
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a processor; and a memory unit operatively connected to the processor and including a computer program product for determining a distance-based premium for vehicle insurance for a customer, comprising; computer code for providing an actual or estimated customer distance driven for the customer over a designated time interval, computer code for determining a rate per distance unit factor for the customer based upon a plurality of criteria, where the rate per distance unit factor over an initial driving range is greater than the rate per distance unit factor n over a subsequent driving range, computer code for inputting the customer'"'"'s determined rate per distance unit factor into a per distance unit based premium calculation, and computer code for using the per distance unit based premium calculation to determine a distance-based premium for the customer. - View Dependent Claims (10, 11, 12)
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13. A method for determining a rate per distance unit equation for use in calculating a distance-based driving insurance premium, comprising:
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providing a system comprising a user interface, a processor and a memory unit; inputting into the system via the user interface a plurality of distance data and loss data; engaging the processor to correlate the distance data with the loss data, the correlation exhibiting a rate per distance unit curve with non-linear distance-based relationship; and applying a curve fitting technique to the correlated distance data and loss data to find an equation that closely matches the exhibited curve. - View Dependent Claims (14, 15, 16)
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17. An electronic device, comprising:
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a processor; and a memory unit operatively connected to the processor and including a computer program product for determining a distance-based premium for vehicle insurance for a customer, comprising; computer code for inputting a plurality of distance data and loss data; computer code for correlating the distance data with the loss data, the correlation exhibiting a rate per distance unit curve with non-linear distance-based relationship; and computer code for applying a curve fitting technique to the correlated distance data and loss data to find an equation that closely matches the exhibited rate per distance unit curve. - View Dependent Claims (18)
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Specification