Usage-Based Insurance Contracts With Blockchain Participant Validation
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Solution Overview
Problem
There is a need for a system and method to securely validate individuals in peer-to-peer commerce systems while providing insurance for transactions, ensuring speed and accuracy in issuing usage-based insurance contracts.
Innovation Solution
A network-based system using blockchain technology to validate participants, generate insurance contracts, and manage transactions, ensuring security and efficiency in peer-to-peer commerce.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If manual insurance contract issuance processes are used in peer-to-peer commerce systems, then security validation can be thorough, but the speed of issuing insurance policies is slow
Solution Approach 1:
The patent replaces manual mechanical processes of insurance contract issuance with automated blockchain-based smart contracts. The system automatically validates participants, generates insurance contracts, and manages transactions through programmable logic on the blockchain, eliminating manual intervention and significantly increasing issuance speed while maintaining security through cryptographic validation.
Solution Approach 2:
The system enables self-service through automated validation and contract generation. Participants are automatically validated against predefined criteria, and insurance contracts are autonomously generated and executed based on transaction data, without requiring manual underwriting or administrative processing. This self-service mechanism dramatically accelerates the insurance issuance process.
2Productivity
If automated systems are used to generate insurance contracts quickly, then issuance speed improves, but accuracy and security validation may be compromised
Solution Approach 1:
The blockchain system provides continuous feedback through immutable transaction records and automated validation checks. Each participant validation and contract generation step is recorded on the blockchain, creating an auditable trail that ensures accuracy. The system feedback mechanism verifies data integrity and participant credentials automatically, maintaining high reliability despite rapid automated processing.
Solution Approach 2:
The system performs preliminary validation of participants and transaction data before insurance contract generation. By pre-validating participant identities, credentials, and transaction parameters against blockchain-stored criteria, the system ensures accuracy is established before the automated contract issuance process begins, preventing errors from propagating through the system.
3Loss of time
If traditional insurance systems are used for peer-to-peer transactions, then comprehensive coverage can be provided, but the system complexity and processing time increase
Solution Approach 1:
The patent segments the insurance system into modular smart contract components on the blockchain. Each insurance policy is a self-contained smart contract that handles specific peer-to-peer transactions independently. This segmentation allows the system to provide comprehensive coverage through standardized, reusable contract templates while keeping individual contract processing simple and rapid, avoiding the complexity of centralized traditional insurance systems.
Data Source
AI summary
A system for generating and managing usage-based insurance contracts configured to (i) store a plurality of offers for sharing transactions, where each of the plurality of offers includes an item being offered and an associated offerer; (ii) receive a selection from a buyer of an offer that is accepted by the buyer of the plurality of offers; (iii) automatically generate a usage-based insurance contract for the sharing transaction based on the offer; and (iv) transmit the insurance contract to at least one of the buyer and the associated offerer.