System and method for salvage calculation, fraud prevention and insurance adjustment

• US 8,229,767 B2
• Filed: 10/18/2006
• Issued: 07/24/2012
• Est. Priority Date: 10/18/2006
• Status: Expired due to Fees

• Current Assignee: Hartford Fire Insurance Company (The Hartford Financial Services Group, Inc.)
• Original Assignee: Hartford Fire Insurance Company (The Hartford Financial Services Group, Inc.)
• Inventors: Birchall, James T.
• Primary Examiner(s): Hammond, III, Thomas M
• Assistant Examiner(s): Puttaiah, Asha
• Application Number:
  US11/582,719
• Publication Number:
  US 20080097796A1
• Time in Patent Office: 2,106 Days
• Field of Search: 705/4
• US Class Current: 705/4
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

Disclosed is a novel system and method that provides real time information to an insurance adjuster. The system obtains information related to an insured item which has an outstanding claim. Information includes the cost to repair a specific item, the salvage value of the item, and the cost to replace the item. The system then compares the information related to the insured item from an economic perspective to determine whether it should be repaired or replaced. Since the system is objective, it reduces the reliance on subjective human factors such as collusion and lack of expertise. As a result, the system reduces the number of fraudulent and inaccurate transactions related to the specific item.

Claims

1. A computer-implemented method for determining whether to repair or replace an insured item insured under a homeowners insurance policy, the homeowners insurance policy insuring against losses to a home and contents of the home and the loss of use of the home and other personal possessions of the insured homeowner, issued by an insurer, of an insured with an outstanding insurance claim, said method comprising the steps of:

receiving by a computer system information relating to the personal possession, including make, model and age;

acquiring by the computer system, employing the received information, information related to the repair cost of the personal possession insured under the homeowners insurance policy, including an estimated cost of repair and a probability of acceptance by the insured of the personal possession if repaired, the probability of acceptance having a value in a range from zero to one, inclusive;

determining by the computer system the repair cost of said personal possession insured under the homeowners insurance policy, based on at least the determined estimated cost of repair multiplied by a factor based on the probability of acceptance, the factor based on the probability of acceptance having a value of one for a value of the probability of acceptance equal to one, the factor based on the probability of acceptance having a value of greater than one for a value of the probability of acceptance less than one;

acquiring by the computer system information related to the replacement cost of said personal possession insured under the homeowners insurance policy, including cost of a replacement for the personal possession and a salvage value of the personal possession;

determining by the computer system the replacement cost of said personal possession insured under the homeowners insurance policy, based on at least the cost of the replacement for the personal possession less the salvage value of the personal possession;

comparing by the computer system said replacement cost of said personal possession to said repair cost of said personal possession insured under the homeowners insurance policy; and

responsive to determining by the computer system in the comparing that the replacement cost is greater than the repair cost, determining by the computer system that repairing said personal possession insured under the homeowners insurance policy fulfills an obligation of the insurer to the insured at lower cost and responsive to determining by the computer system in the comparing that the repair cost is greater than the replacement cost, determining by the computer system that replacing said personal possession insured under the homeowners insurance policy fulfills an obligation of the insurer to the insured at lower cost.

2. The method of claim 1, wherein said step of acquiring information related to the repair cost of said personal possession occurs in real-time.

3. The method of claim 2, wherein said step of acquiring information related to the repair cost of said personal possession occurs by utilizing the Internet.

4. The method of claim 1, wherein said step of acquiring information related to the replacement cost of the personal possession occurs in real-time.

5. The method of claim 4, wherein said step of acquiring information related to the replacement cost of the personal possession occurs by utilizing the Internet.

6. The method of claim 1, wherein said step of acquiring the salvage value of the personal possession occurs in real-time.

7. The method of claim 6, wherein said step of acquiring the salvage value of the personal possession occurs by utilizing the Internet.

18. The method of claim 1, wherein the step of determining the repair cost includes modifying the repair cost by adding shipping costs.

19. The method of claim 18, wherein the step of modifying the repair cost further includes adding storage costs.

20. The method of claim 1, further comprising modifying the repair cost to a net present value of the repair cost an estimated time to repair the personal possession as a duration in determining the net present value of the repair cost.

8. A method for determining whether to repair or replace an insured item in the nature of a personal possession kept within a home, insured under a homeowners insurance policy, the homeowners insurance policy insuring against losses to a home and contents of the home and the loss of use of the home and other personal possessions of the insured homeowner, issued by an insurer, of an insured using a web-based system including a server computer with at least one database and at least one device connected to the server computer via a network, said method comprising the steps of:

storing by the server computer information related to the repair cost of said personal possession insured under the homeowners insurance policy in a database, including an estimated cost of repair of the personal possession and a probability of acceptance by the insured of the personal possession if repaired, the probability of acceptance having a value in a range from zero to one, inclusive;

storing by the server computer information related to the replacement cost of said personal possession insured under the homeowners insurance policy, including cost of a replacement for the personal possession and a salvage value of the personal possession, in a database;

receiving a query at the server computer, pertaining to said personal possession insured under the homeowners insurance policy, the query including make, model and age of the personal possession;

retrieving by the server computer said information related to the repair cost of said personal possession insured under the homeowners insurance policy from said database in response to said received query;

determining by the server computer the repair cost of said personal possession item employing the estimated cost to repair multiplied by a factor based on the probability of acceptance by the insured of the personal possession if repaired, the factor based on the probability of acceptance having a value of one for a value of the probability of acceptance equal to one, the factor based on the probability of acceptance having a value of greater than one for a value of the probability of acceptance less than one;

retrieving by the server computer said information related to the replacement cost of said personal possession insured under the homeowners insurance policy from said database in response to said received query;

determining by the server computer the replacement cost of said personal possession based on the cost of the replacement for the personal possession less the salvage value of the personal possession;

comparing by the server computer said determined replacement cost of said personal possession insured under the homeowners insurance policy with said determined repair cost of said personal possession; and

responsive to determining by the server computer in the the comparing that the replacement cost is greater than the repair cost, determining that repairing said at least one personal possession insured under the homeowners insurance policy fulfills an obligation of the insurer under the homeowners insurance policy at lower cost and responsive to determining by the server computer in the comparing that the repair cost is greater than the replacement cost, determining that replacing said at least one personal possession insured under the homeowners insurance policy fulfills an obligation of the insurer under the homeowners insurance policy at lower cost.

9. The method of claim 8, wherein said information related to the repair cost of said personal possession in a database comprises historical data of cost of past repairs of a same or similar item.

10. The method of claim 8, wherein said information related to the replacement cost of said personal possession in a database comprises historical data of cost of a same or similar item.

11. The method of claim 8, further comprising the step of:

storing information related to the salvage value of said personal possession in a database.

12. The method of claim 11, wherein said information related to the salvage value of said personal possession in a database comprises historical data of past salvage value of a same or similar item.

13. The method of claim 8, further comprising the step of:

updating said information related to the repair cost of said personal possession in a database in real time.

14. The method of claim 8, further comprising the step of:

updating said information related to the replacement cost of said personal possession in a database in real time.

15. The method of claim 8, further comprising the step of:

displaying the result of said step of determining whether to repair or replace said personal possession to said at least one device.

16. The method of claim 8, wherein said step of retrieving said information related to the repair cost of said personal possession from said database in response to said received query occurs in real time.

17. The method of claim 8, wherein said step of retrieving said information related to the replacement cost of said personal possession from said database in response to said received query occurs in real time.

21. A computer system for determining whether to repair or replace an insured item in the nature of a personal possession maintained within a home, insured under a homeowners insurance policy, the homeowners insurance policy insuring against losses to a home and contents of the home and the loss of use of the home and other personal possessions of the insured homeowner, issued by an insurer, of an insured with an outstanding insurance claim under the homeowners insurance policy, comprising:

a processor, and

one or more databases accessible by the processor;

the processor being adapted to;

access from the one or more databases information related to the repair cost of the personal possession insured under the homeowners insurance policy, including an estimated cost of repair and a probability of acceptance by the insured of the personal possession if repaired, the probability of acceptance having a value in a range from zero to one, inclusive;

determine the repair cost of the personal possession insured under a homeowners insurance policy by multiplying the estimated cost of repair by a factor based on the probability of acceptance by the insured, the factor based on the probability of acceptance having a value of one for a value of the probability of acceptance equal to one, the factor based on the probability of acceptance having a value of greater than one for a value of the probability of acceptance less than one;

access from the one or more databases information related to the replacement cost of the personal possession insured under a homeowners insurance policy, including cost of a replacement for the personal possession and a salvage value of the personal possession;

determine the replacement cost of said personal possession insured under a homeowners insurance policy, based on at least the cost of the replacement for the personal possession and the salvage value of the personal possession;

compare said replacement cost of said personal possession insured under a homeowners insurance policy to said repair cost of said personal possession insured under a homeowners insurance policy; and

determine, responsive to determining that the repair cost is greater than the replacement cost, that replacing said at least one personal possession insured under the homeowners insurance policy fulfills an obligation of the insurer under the homeowners insurance policy at lower cost and determine, responsive to determining that the replacement cost is greater than the repair cost, that repairing the personal possession insured under a homeowners insurance policy fulfills an obligation of the insurer under the homeowners insurance policy at lower cost.

22. The system of claim 21, wherein the processor is further adapted to modify the repair cost by adding shipping costs.

23. The system of claim 21, wherein the processor is further adapted to modify the repair cost by adding storage costs.

24. The system of claim 21, wherein the processor is further adapted to modify the repair cost to a net present value of the repair cost employing an estimated time to repair the item as a duration in determining the net present value of the repair cost.