System and method for repair calculation, replacement calculation, and insurance adjustment

• US 8,719,061 B2
• Filed: 07/23/2012
• Issued: 05/06/2014
• 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): Subramanian, Narayanswamy
• Assistant Examiner(s): Puttaiah, Asha
• Application Number:
  US13/555,587
• Publication Number:
  US 20120290333A1
• Time in Patent Office: 652 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 system for determining whether to repair or replace an insured item in the nature of personal property, insured under an insurance policy, comprising:

a computer processor, and

one or more databases in one or more data storage devices accessible by the computer processor;

the computer processor being configured to;

access from the one or more databases data indicative of the repair cost of the personal property, including an estimated cost of repair and a probability of acceptance by the insured of the personal property if repaired, the probability of acceptance having a value in a range from zero to one, inclusive;

determine the repair cost of the personal property 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 and a value of greater than one for a value of the probability of acceptance less than one;

access from the one or more databases a cost of a replacement for the personal property and a salvage value of the personal property;

determine the replacement cost of said personal property based on at least the cost of the replacement for the personal property and the salvage value of the personal property;

compare said replacement cost of said personal property to said repair cost of said personal property; and

determine, responsive to determining in the comparing of said replacement cost to said repair cost, that the replacement cost is greater than the repair cost, that repair of said personal property fulfills an obligation of the insurer to the insured at the lowest cost, and, determine, responsive to determining in the comparing that the repair cost is greater than the replacement cost, determine that replacement of said personal property fulfills an obligation of the insurer at the lowest cost; and

store in the one or more databases data indicative of the lowest cost determination.

2. The system of claim 1, wherein the computer processor is further configured to modify the repair cost by adding one or both of storage costs and shipping costs.

3. The system of claim 1, wherein the computer processor is further configured 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.

4. The system of claim 1, further comprising a display device and wherein said computer processor is in communication with said display device and is further configured to provide data indicative of the lowest cost determination to the display device for display.

5. The system of claim 1, wherein said one or more databases are remotely located from said computer processor and said computer processor is further configured to access said one or more databases via a communications network.

7. The system of claim 1, wherein the insured item is an item of personal property, and the insurance policy is a homeowners insurance policy.

6. A computer-implemented method for determining whether to repair or replace personal property insured under an insurance policy, said method comprising the steps of:

acquiring by a computer system data indicative of an estimated cost of repair and a probability of acceptance by the insured of the personal property if repaired, the probability of acceptance having a value in a range from zero to one, inclusive, via communications over a network with one or more data storage devices storing data;

determining by the computer system a repair cost of said personal property, 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 and a value of greater than one for a value of the probability of acceptance less than one;

acquiring by the computer system data indicative of a cost of a replacement for the personal property and a salvage value of the personal property;

determining by the computer system a replacement cost of said personal property, based on at least the cost of the replacement for the personal property less the salvage value of the personal property;

comparing by the computer system said determined replacement cost of said personal property to said determined repair cost of said personal property;

determining by the computer system, responsive to determining in the comparing of the replacement cost and the repair cost, that the replacement cost is greater than the repair cost, that repair of said personal property fulfills an obligation of the insurer to the insured at the lowest cost, and determining by the computer system, responsive to determining in the comparing of the replacement cost and the repair cost, that the repair cost is greater than the replacement cost, that replacement of the personal property fulfills an obligation of the insurer at lowest cost; and

displaying on a display of the computer system the lowest cost determination.

8. The method of claim 6, wherein one or both of said steps of acquiring the estimated cost of repair and acquiring the salvage value of the personal property occurs in real-time.

9. The method of claim 8, wherein one or both of said steps of acquiring the estimated cost of repair and acquiring the salvage value of the personal property occurs by utilizing the Internet.

10. The method of claim 6, wherein the step of determining the repair cost includes modifying the repair cost by adding one or both of shipping costs and storage costs.

11. The method of claim 6, further comprising the step of modifying the repair cost to a net present value of the repair cost employing an estimated time to repair the personal property as a duration in determining the net present value of the repair cost.

12. The method of claim 6, further comprising the step of:

acquiring data indicative of the personal property including one or more of make, model, and age,

and wherein said data indicative of the personal property is employed in one or more of the steps of acquiring the estimated repair cost, acquiring the probability of acceptance, acquiring the replacement value, and acquiring the salvage value.

13. A method for determining whether to repair or replace an insured item in the nature of personal property, insured under an insurance policy, using a web-based system including a server computer with one or more databases and at least one device connected to the server computer via a network, said method comprising the steps of:

storing by the server computer in the one or more databases data indicative of the repair cost of said personal property, including an estimated cost of repair of the personal property and a probability of acceptance by the insured of the personal property if repaired, the probability of acceptance having a value in a range from zero to one, inclusive;

storing by the server computer in the one or more databases data indicative of the replacement cost of said personal property, including a cost of a replacement for the personal property and a salvage value of the personal property;

receiving at the server computer a query pertaining to said personal property;

retrieving by the server computer said data indicative of the repair cost of said personal property from said one or more databases in response to said received query;

determining by the server computer the repair cost of said personal property item employing the estimated cost to repair multiplied by a factor based on the probability of acceptance by the insured of the personal property 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 and a value of greater than one for a value of the probability of acceptance less than one;

retrieving by the server computer said data indicative of the replacement cost of said personal property from said one or more databases in response to said received query;

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

comparing by the server computer said determined replacement cost of said personal property with said determined repair cost of said personal property;

determining, by the server computer, based on the comparing of the determined replacement cost and the determined repair cost, the one of repair or replacement of said personal property that fulfills an obligation of the insurer at lowest cost; and

storing, by the server computer, data indicative of the lowest cost determination.

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

updating in real time one or both of said data indicative of the repair cost of said personal property in a database and said data indicative of the replacement cost of said personal property in a database.

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

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

16. The method of claim 13, wherein one or both of said steps of retrieving said data indicative of the repair cost of said personal property from said database in response to said received query and retrieving said data indicative of the replacement cost of said personal property from said database in response to said received query occurs in real time.