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:
- receiving from a remote terminal information concerning one of actual distance traveled and estimated distance traveled;
calculating, in a processor, a customer premium based at least in part upon;
the one of actual distance traveled and estimated distance traveled,a variable rate per distance unit factor, the rate per distance unit factor decreasing over a first range as the one of actual distance traveled and estimated distance traveled increases, anda calculated rate per distance unit equation, the rate per distance unit equation calculated for a rate per distance unit curve, and determined by;
processing a received plurality of distance data and loss data;
correlating the distance data with the loss data, the correlation exhibiting a 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; and
transmitting, by the processor, the calculated customer premium.
1 Assignment
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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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receiving from a remote terminal information concerning one of actual distance traveled and estimated distance traveled; calculating, in a processor, a customer premium based at least in part upon; the one of actual distance traveled and estimated distance traveled, a variable rate per distance unit factor, the rate per distance unit factor decreasing over a first range as the one of actual distance traveled and estimated distance traveled increases, and a calculated rate per distance unit equation, the rate per distance unit equation calculated for a rate per distance unit curve, and determined by; processing a received plurality of distance data and loss data; correlating the distance data with the loss data, the correlation exhibiting a 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; and
transmitting, by the processor, the calculated customer premium. - View Dependent Claims (2, 3, 4, 5, 6, 17, 18)
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7. A computer program product, embodied in a non-transitory computer-readable medium, comprising computer code configured to:
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process information received from a remote terminal concerning one of actual distance traveled and estimated distance traveled; and calculate, by a processor, a customer premium based at least in part upon;
the one of actual distance traveled and estimated distance traveled, anda variable rate per distance unit factor, the rate per distance unit factor decreasing over a first range as the one of actual distance traveled and estimated distance traveled increases, wherein the rate per distance unit factor is calculated based on a formulae comprising; - View Dependent Claims (8, 9, 10)
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11. An electronic device, comprising:
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a processor; and a memory unit operatively connected to the processor and including computer code for determining a distance-based premium for vehicle insurance for a customer, wherein the electronic device is configured to, when the computer code is processed by the processor; receive from a remote terminal information concerning one of actual distance traveled and estimated distance traveled; calculate, a customer premium based at least in part upon; the one of actual distance traveled and estimated distance traveled, and a variable rate per distance unit factor, the rate per distance unit factor decreasing over a first range as the one of actual distance traveled and estimated distance traveled increases, wherein the rate per distance unit factor is calculated based on a formulae comprising;
exp(c*(Lix)) if x<
L;
exp(d*(x−
U)) if x>
U;
1 if L<
=x<
U;
wherein x is the one of actual distance traveled and estimated distance traveled, wherein L represents a low bound for a distance range where the rate per distance unit factor possesses its lowest value;
wherein U represents an upper bound for the distance range where the rate per distance unit factor possesses its lowest value, and wherein c and d are parameters set by an entity; and
transmit the calculated customer premium. - View Dependent Claims (12, 13, 14, 15, 16)
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Specification