Usage-based insurance cost determination system and method

Details Usage-based insurance cost determination system and method Usage-based insurance cost determination system and method

2011-05-03

2011-05-03

Patel, Jagdish N (Department: 3693)

Data processing: financial, business practice, management, or co

Automated electrical financial or business practice or...

Insurance

Reexamination Certificate

active

07937278

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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