Fuel-Purchase Vehicle Coverage With Risk-Based Pricing
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Solution Overview
Problem
Existing methods for providing vehicle coverage, such as auto insurance, often involve intermediaries like brokers, leading to increased costs and inefficiencies. Additionally, traditional insurance models do not accurately reflect the risk associated with individual vehicle operators, resulting in coverage that may not align with actual usage.
Innovation Solution
The proposed solution involves providing vehicle coverage directly to vehicle operators through a network of fueling stations, where the coverage amount is determined based on fuel data and vehicle data collected during fuel purchases. This model eliminates intermediaries, connects the cost of coverage directly to the risk associated with individual operators, and adjusts coverage based on factors like mileage, accident risk, and geographical location.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of energy
If traditional insurance models with intermediaries are used, then coverage distribution is established, but costs increase and efficiency decreases
Solution Approach 1:
The patent extracts and removes intermediaries (brokers, agents) from the insurance distribution chain, enabling direct connection between fuel providers and vehicle operators. This eliminates unnecessary layers in the system, reducing costs while maintaining coverage distribution functionality through direct fuel purchase-based coverage activation.
Solution Approach 2:
The patent merges the insurance distribution function with the existing fuel purchase system. By combining these two functions, the system eliminates separate intermediary structures and uses the fuel purchase infrastructure to directly provide and manage vehicle coverage, reducing overall system complexity and cost.
2Measurement precision
If traditional insurance models are used, then coverage is provided, but it does not accurately reflect individual operator risk
Solution Approach 1:
The patent applies local quality by tailoring insurance coverage to individual vehicle operators based on their specific characteristics, driving patterns, and risk profiles. Instead of uniform coverage, the system customizes protection levels and pricing for each operator, achieving precise risk measurement and accurate reflection of individual exposure.
Solution Approach 2:
The patent implements dynamic coverage adjustment based on real-time data from vehicle sensors, fuel purchase patterns, and operational characteristics. Coverage levels and pricing can change dynamically as operators accumulate safe driving data or exhibit changed risk patterns, enabling continuous adaptation to individual risk profiles.
3Ease of operation
If coverage is provided through intermediaries, then distribution is achieved, but the cost does not align with actual usage
Solution Approach 1:
The patent implements feedback loops where vehicle sensor data, fuel purchase information, and operational metrics continuously inform coverage adjustments. This feedback mechanism enables usage-based pricing by constantly updating coverage levels and premiums based on actual driving behavior, mileage, and risk events, ensuring cost alignment with actual usage patterns.
Solution Approach 2:
The system enables operators to effectively self-manage their coverage through the fuel purchase interface, where coverage is automatically activated and adjusted based on their purchasing patterns and vehicle data. This eliminates intermediary management while providing personalized, usage-based coverage that adapts to each operator's actual needs and behavior.
Data Source
AI summary
Methods and systems are described that provide disruptive models for distributing vehicle coverage while providing fuel suppliers and/or vehicle manufacturers with profitable new revenue streams, while potentially eliminating third-party insurance brokers to reduce costs and directly connecting the cost of vehicle coverage to the risk associated with individual vehicle operators.