System and Method for Insurance Underwriting and Rating

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.

We claim: 
     
         1 . A method of underwriting an insurance policy comprising:
 identifying a vehicle;   forming at least one data grouping including at least one vehicle history data variable of the identified vehicle;   processing the at least one vehicle history data variable of the at least one data grouping;   determining an overall value of said at least one data grouping; and   underwriting an insurance policy for the identified vehicle based on said overall value of the at least one data grouping.   
     
     
         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 , wherein said at least one data grouping includes a plurality of data groupings, said method further comprising generating a score based upon an overall value of each of the plurality of data groupings and rating the policy based on the score. 
     
     
         4 . 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. 
     
     
         5 . 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. 
     
     
         6 . The method of  claim 1 , further comprising:
 generating a score based upon the overall value of each of a plurality of data groupings;   wherein said underwriting step comprises underwriting an insurance policy for the selected vehicle based on the score; and   wherein the plurality of data groupings is included in the at least one data grouping.   
     
     
         7 . The method of  claim 1 , wherein the 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.   
     
     
         8 . 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.   
     
     
         9 . A method of rating an insurance policy comprising:
 identifying a vehicle;   forming at least one data grouping including of least one vehicle history data variable of the identified vehicle;   processing the at least one vehicle history data variable of the at least one data grouping;   determining an overall value of said at least one data grouping; and   rating an insurance policy for the identified vehicle based on said overall value of the at least one data grouping.   
     
     
         10 . The method of  claim 9 , wherein the similarity of vehicle history data variables within a data grouping includes being similar in at least one of type and loss ratio value. 
     
     
         11 . The method of  claim 9 , wherein the overall value is indicative of the likelihood of incurring future vehicle repair costs. 
     
     
         12 . The method of  claim 9 , further comprising: generating a score based upon an overall value of each of a plurality of data groupings;
 wherein said rating step comprises rating the policy based on the score; and   wherein the plurality of data groupings is included in the at least one data grouping.   
     
     
         13 . The method of  claim 12 , wherein said score is calculated based on a weighted combination of overall values of said plurality of data groupings. 
     
     
         14 . The method of  claim 13 , wherein said score is the sum of weighted overall values of each of said plurality of data groupings represented as a mathematical equation. 
     
     
         15 . A method of determining insurability of a vehicle comprising:
 identifying a vehicle;   forming at least one data grouping including at least one vehicle history data variable of the identified vehicle;   processing the at least one vehicle history data variable of the at least one data grouping;   determining an overall value of said at least one data grouping; and   calculating insurability of the identified vehicle based on said overall value of the at least one data grouping.   
     
     
         16 . The method of  claim 15 , wherein said at least one data grouping includes a plurality of data groupings, said method further comprising generating a score based upon an overall value of each of the plurality of data groupings and calculating insurability of the identified vehicle based on the score. 
     
     
         17 . The method of  claim 16 , wherein said score is calculated based on a weighted combination of overall values of said plurality of data groupings. 
     
     
         18 . The method of  claim 17 , wherein said score is the sum of weighted overall values of each of said plurality of data groupings represented as a mathematical equation. 
     
     
         19 . The method of  claim 15 , wherein the overall value is indicative of the likelihood of incurring future vehicle repair costs. 
     
     
         20 . The method of  claim 16 , wherein the score is characterized as at least one of one of a number, mark, symbol, and color.