System and method for insurance underwriting and rating

• US 8,255,243 B2
• Filed: 07/13/2011
• Issued: 08/28/2012
• Est. Priority Date: 04/20/2007
• Status: Expired due to Fees

• Current Assignee: CARFAX Incorporated (S&P Global Inc.)
• Original Assignee: CARFAX Incorporated (S&P Global Inc.)
• Inventors: Raines, Richard, Nesson, Eric, Lackey, David, Fritts, Travis, Bush, Ian
• Primary Examiner(s): Colbert, Ella
• Assistant Examiner(s): Shaikh, Mohammad Z
• Application Number:
  US13/181,736
• Publication Number:
  US 20110270635A1
• Time in Patent Office: 412 Days
• Field of Search: 705 35- 42, 705/1.1, 705/4
• US Class Current: 705/4
• CPC Class Codes: G06Q 10/10 Office automation; Time management
• CPC Class Codes: G06Q 30/0278 Product appraisal
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

An apparatus and method for underwriting and/or rating an insurance policy, and for generating information for underwriting and/or rating an insurance policy, are provided. The system and method may include identifying a vehicle, determining a value of at least one vehicle history data variable or a group of variables, and underwriting and/or rating the policy based on the value of the at least one vehicle history data variable or a group of variables. The system and method may also include generating a score based on the value of the at least one vehicle history data variable or group of variables.

Claims

1. A method of underwriting an insurance policy comprising:

identifying a vehicle;

forming, in a physical memory of a data processing system, a plurality of data groupings using a processing device of the data processing system, wherein each of the plurality of data groupings include at least one vehicle history data variable of the identified vehicle;

processing the at least one vehicle history data variable of at least one data grouping of the plurality of data groupings using the processing device of the data processing system;

determining an overall value of said at least one data grouping using the processing device of the data processing system;

generating a score, using the processing device of the data processing system, based upon the overall value of said at least one data grouping; and

outputting from the data processing system information relating to underwriting of an insurance policy for the identified vehicle that is based on said score.

2. The method of claim 1, further comprising:

rating the insurance policy for the identified vehicle based on said overall value of said at least one data grouping.

3. The method of claim 2, further comprising rating the policy based on the score.

4. The method of claim 3, wherein said score is calculated based on a weighted combination of overall values of said plurality of data groupings.

5. The method of claim 4, wherein said score is a sum of weighted overall values of each of said plurality of data groupings represented as a mathematical equation.

6. The method of claim 1, wherein the step of determining an overall value is based on whether a vehicle possesses or does not possess a characteristic of at least some of said at least one vehicle history data variable.

7. The method of claim 1, wherein a plurality of vehicle history data variables formed within a data grouping are similar.

8. The method of claim 7, wherein the similarity of the plurality of vehicle history data variables within a data grouping includes being similar in at least one of type and loss ratio value.

9. The method of claim 1, wherein the at least one data grouping includes at least one of:

a Severe Problem data grouping;

a Potential Damage data grouping;

a Ownership History data grouping;

a Ownership Type data grouping;

a Annual Mileage data grouping; and

a Potential Fraud data grouping.

10. The method of claim 1, wherein the overall value is indicative of the likelihood of incurring future vehicle repair costs.

11. The method of claim 1, wherein the score is characterized as at least one of a number, mark, symbol, and color.

12. The method of claim 1, wherein said score is calculated based on a weighted combination of overall values of said plurality of data groupings.

13. The method of claim 12, wherein said score is a sum of weighted overall values of each of said plurality of data groupings represented as a mathematical equation.

14. The method of claim 1, wherein the at least one vehicle history data variables include at least one of:

Air Bag Deployed;

Abandoned;

Canadian Total Loss;

Commercial Vehicle;

Corporate Fleet Crash Test Vehicle;

Curbstoning Advisory;

Damage Disclosure;

Dismantled;

Duplicate Title Issued;

Emissions Test;

Estimated Current Mileage;

Exceeds Mechanical Limits;

Exported Vehicle;

Flood Advisory;

Flood Damaged;

Fire;

Fire Damage;

Frame Inspection;

Grey Market Vehicle;

Gross Polluter;

Hail Damaged;

Inconsistent Odometer Reading;

Imported Vehicle;

Junk;

Last Owner—

First Odometer Reading;

Last Owner—

First Odometer Reading Date;

Last Owner—

Last Odometer Reading;

Last Owner—

Last Odometer Reading Date;

Last Owner—

Average Annual Mileage;

Last Owner—

Recent Annual Mileage;

Last Owner—

Last 12 Months Average Annual Mileage;

Last Owner—

Last 24 Months Average Annual Mileage;

Last Owner—

Last 36 Months Average Annual Mileage;

Last Owner Length of Ownership;

Last Owner Lien Reported;

Lease Vehicle;

Manufacturer Buyback (Lemon);

Not Actual Mileage;

Number of Owners;

Number of Owners Footnote;

Odometer Problem Flag;

Odometer Rollover;

Personal;

Police Accident Report;

Police Accident Report—

Severe Damage;

Police Vehicle;

Potential Damage Flag;

Potential Odometer Problem;

Rebuilt Title Brand;

Reconstructed Title Brand;

Recycle Vehicle;

Rental Vehicle;

Reported as Stolen;

Repossessed;

Safety Inspection Failed;

Salvaged Auction;

Severe Accident Flag;

Stolen Vehicle Flag;

Reported Stolen;

Theft Recovery;

Insurance Total Loss;

Taxi Vehicle;

Verified Odometer Rollback; and

VIN Cloning Advisory.

15. The method of claim 1, wherein said forming step comprises deriving a vehicle history data variable for at least one of:

Number of Owners;

Duplicate Title Issued;

Estimated Current Mileage;

Flood Advisory;

Gray Market Vehicle Last Owner—

Annual Mileage;

Last Owner—

Recent Annual Mileage;

Last Owner—

Length of Ownership;

Potential Damage Flag;

Severe Accident Flag; and

Insurance Total Loss.

16. A non-transitory computer readable media comprising code to perform the steps of method 1.

17. An apparatus for underwriting an insurance policy comprising:

means for identifying a vehicle;

means for forming a plurality of data groupings, wherein each of the plurality of data groupings includes at least one vehicle history data variable of the identified vehicle;

means for processing the at least one vehicle history data variable of at least one data grouping of the plurality of data groupings;

means for determining an overall value of said at least one data grouping;

means for generating a score based upon the overall value of the at least one data grouping; and

means for underwriting an insurance policy for the identified vehicle based on said score.

18. The apparatus of claim 17, further comprising:

means for rating the insurance policy for the identified vehicle based on said overall value of said at least one data grouping.

19. The apparatus of claim 18, further comprising rating the policy based on the score.

20. The apparatus of claim 19, wherein said score is calculated based on a weighted combination of overall values of said plurality of data groupings.

21. The apparatus of claim 20, wherein said score is a sum of weighted overall values of each of said plurality of data groupings represented as a mathematical equation.

22. The apparatus of claim 17, wherein the means for determining an overall value determines the overall value based on whether a vehicle possesses or does not possess a characteristic of at least some of said at least one vehicle history data variable.

23. The apparatus of claim 17, wherein a plurality of vehicle history data variables formed within a data grouping are similar.

24. The apparatus of claim 23, wherein the similarity of the plurality of vehicle history data variables within a data grouping includes being similar in at least one of type and loss ratio value.

25. The apparatus of claim 17, wherein the at least one data grouping includes at least one of:

a Severe Problem data grouping;

a Potential Damage data grouping;

a Ownership History data grouping;

a Ownership Type data grouping;

a Annual Mileage data grouping; and

a Potential Fraud data grouping.

26. The apparatus of claim 17, wherein the overall value is indicative of the likelihood of incurring future vehicle repair costs.

27. The apparatus of claim 17, wherein the score is characterized as at least one of a number, mark, symbol, and color.

28. The apparatus of claim 17, wherein said score is calculated based on a weighted combination of overall values of said plurality of data groupings.

29. The apparatus of claim 28, wherein said score is a sum of weighted overall values of each of said plurality of data groupings represented as a mathematical equation.

30. The apparatus of claim 17, wherein the at least one vehicle history data variables include at least one of:

Air Bag Deployed;

Abandoned;

Canadian Total Loss;

Commercial Vehicle;

Corporate Fleet Crash Test Vehicle;

Curbstoning Advisory;

Damage Disclosure;

Dismantled;

Duplicate Title Issued;

Emissions Test;

Estimated Current Mileage;

Exceeds Mechanical Limits;

Exported Vehicle;

Flood Advisory;

Flood Damaged;

Fire;

Fire Damage;

Frame Inspection;

Grey Market Vehicle;

Gross Polluter;

Hail Damaged;

Inconsistent Odometer Reading;

Imported Vehicle;

Junk;

Last Owner—

First Odometer Reading;

Last Owner—

First Odometer Reading Date;

Last Owner—

Last Odometer Reading;

Last Owner—

Last Odometer Reading Date;

Last Owner—

Average Annual Mileage;

Last Owner—

Recent Annual Mileage;

Last Owner—

Last 12 Months Average Annual Mileage;

Last Owner—

Last 24 Months Average Annual Mileage;

Last Owner—

Last 36 Months Average Annual Mileage;

Last Owner Length of Ownership;

Last Owner Lien Reported;

Lease Vehicle;

Manufacturer Buyback (Lemon);

Not Actual Mileage;

Number of Owners;

Number of Owners Footnote;

Odometer Problem Flag;

Odometer Rollover;

Personal;

Police Accident Report;

Police Accident Report—

Severe Damage;

Police Vehicle;

Potential Damage Flag;

Potential Odometer Problem;

Rebuilt Title Brand;

Reconstructed Title Brand;

Recycle Vehicle;

Rental Vehicle;

Reported as Stolen;

Repossessed;

Safety Inspection Failed;

Salvaged Auction;

Severe Accident Flag;

Stolen Vehicle Flag;

Reported Stolen;

Theft Recovery;

Insurance Total Loss;

Taxi Vehicle;

Verified Odometer Rollback; and

VIN Cloning Advisory.

31. The apparatus of claim 17, wherein said means for forming comprises means for deriving the at least one vehicle history data variables for at least one of:

Number of Owners;

Duplicate Title Issued;

Estimated Current Mileage;

Flood Advisory;

Gray Market Vehicle Last Owner—

Annual Mileage;

Last Owner—

Recent Annual Mileage;

Last Owner—

Length of Ownership;

Potential Damage Flag;

Severe Accident Flag; and

Insurance Total Loss.