Newly Patented CarFax Technology Used By Car Insurers
CarFax was awarded two patents in recent months which highlight how the company services can tie a vehicles history to how insurers price insurance for the same vehicle. The patents were awarded in August by the U.S. Patent and Trademark Office (USPTO) and protect the company’s rights to “apparatus and method” for rating and underwriting insurance policies based on data from the vehicles history. This system, according to the USPTO filing can enhance the underwriting of an insurance policy for vehicles based on scores produced by the system using the vehicles background.
Experts say that while insurers have always looked at the type of car being quoted, taking the history of a specific vehicle into account is a brand new concept. In the past, insurers have used CarFax data to check if a vehicle has been damaged by flood, fire or has been issued a salvage title. The latest, and now patented system would let insurers access information regarding air bag deployment, the number of owners as well as hail damage reports. Studies have shown that prior damage is often linked to incidents of further damage. Using this information insurers can properly rate specific cars.
Patents 8255243 and 8255244 should have more and more insurers working with CarFax, a company that already works with many top name insurance clients.
The newly patented systems incorporate several variables which can be used by insurers. Accident, title and mileage data is key to an insurers evaluation of a vehicle. Odometer readings help insurers assess the miles traveled in a vehicle which can be incorporated in actuarial tables. It can also be used in the investigation of claims. All of this allows for more accurate rates, which is good for both insurers and customers.
Weather Events Make Vehicle Histories More Important
The recent Superstorm Sandy has highlighted the importance of vehicle history reports to insurers. Several groups have issued consumer warning in regards to flood damaged vehicle making their way into the marketplace. Less than honest resellers and auto dealers could attempt to sell flood-damaged vehicles without disclosing the damage to potential buyers.
Using a vehicle history report like CarFax can help consumers and insurers identify vehicles that have been damaged by storms such as Sandy. Going a step further, state officials have promised to help out in identifying possible flood damaged vehicles. Jesse White, Secretary of State in Illinois recently announced that his office would screen title applications for vehicles that are coming from areas that were affected by Superstorm Sandy. In order to get a clean title in Illinois a Hurricane Disclosure Statement will have to be signed by the registered owner of the vehicle as well as an insurance agent. The latest CarFax technology should be able to help with this requirement.
Saltwater can severely damage a car and create both corrosion and electrical problems long after the exposure to the water. This makes it important that consumers and insurers check out the history of a vehicle before making an offer. Flood damaged vehicles often have much shorter lifespans and are likely to require costly repairs.
Newly patented technology from CarFax will allow insurers to use a vehicle history report to help determine an accurate premium.