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Insurance Abstract
A system for the adjudication of insurance claims, such as automobile
repair claims, by an insurance provider is provided. A claim submitted
by a policyholder is received is received by the insurance provider.
The claim is assigned to an insurance adjuster. The insurance provider
receives a determination of a dollar value of the claim from the
adjuster, and uses this information to determine how much money
to disburse to the policyholder. The insurance provider then issues
an account funded with the dollar value of the claim to the policyholder,
accessible by the policyholder through a card. As the card is used,
the insurance provider collects purchase information, such as information
relating to the date, place, and amount of each purchase made on
the account. The insurance provider may then collate the purchase
information in a database and analyze the data for mathematically
significant trends and relationships.
Insurance Claims
1. A method for administering insurance claims and monitoring claim-related
data in a database, comprising the steps of: (a) receiving a claim;
(b) determining a dollar value of the claim; (c) issuing a bill-on-redemption
card account funded with a point value related to said dollar value
of the claim; (d) paying at least some portion of the dollar value
of the claim when the card account is used by a card recipient;
(e) collecting purchase information from the card account; and (f)
entering the purchase information into the database.
2. The method according to claim 1, further comprising the step
of: (g) using the database to review purchase trends.
3. The method according to claim 1, further comprising the step
of: (g) using the database to review insurance investigations for
accuracy.
4. The method according to claim 1, wherein the card account is
a debit card account.
5. The method according to claim 1, wherein the card account is
a credit card account.
6. The method according to claim 1, wherein the claim relates to
Workman's Compensation.
7. The method according to claim 1, wherein the claim relates to
employee disability payments.
8. The method according to claim 1, wherein the claim is an insurance
claim.
9. The method according to claim 1, wherein the purchase information
reflects an actual repair cost of an automobile and further comprising
the step of: (g) comparing the determined dollar value of the claim
to the actual repair cost of the automobile.
10. The method according to claim 1, wherein the claim relates
to an automobile accident.
11. The method according to claim 1, wherein the claim relates
to medical treatment.
12. The method according to claim 1, wherein the claim relates
to death benefits.
13. The method according to claim 1, wherein the claim relates
to property damage.
14. The method according to claim 1, wherein the claim relates
to property loss.
15. The method according to claim 1, wherein the claim relates
to theft.
16. The method according to claim 1, wherein the information collected
in step (e) includes a time of purchase.
17. The method according to claim 1, wherein the information collected
in step (e) includes an amount of purchase.
18. The method according to claim 1, wherein the information collected
in step (e) includes a place of purchase.
19. The method according to claim 1, wherein the information collected
in step (e) includes a time, place, and amount of each purchase.
20. The method according to claim 1, further comprising the step
of: (g) closing the account after a predetermined amount of time.
21. The method of claim 20, further comprising the step of: before
step (g), reimbursing the insured any money remaining in the account.
22. The method of claim 1, wherein the card account is managed
by an independent claim service provider.
23. The method of claim 1, wherein the card account is managed
by an insurance company.
24. A method for administering ongoing insurance claims, comprising
the steps of: (a) receiving a claim; (b) determining a plurality
of ongoing disbursement dollar values for the claim; (c) issuing
a card account funded with a first disbursement of said plurality
of disbursement dollar values; and (d) loading a second disbursement
of said plurality of disbursement dollar values onto said card account
according to a schedule.
25. The method according to claim 24, wherein the card account
is a debit card account.
26. The method according to claim 24, wherein the card account
is a credit card account.
27. The method according to claim 24, wherein the claim relates
to Workman's Compensation.
28. The method according to claim 24, wherein the claim relates
to employee disability payments.
29. The method according to claim 24, wherein the card account
is a bill-on-redemption card account.
30. The method according to claim 24, wherein the claim relates
to an automobile accident.
31. The method according to claim 24, wherein the claim relates
to medical treatment.
32. The method according to claim 24, wherein the claim relates
to death benefits.
33. The method according to claim 24, wherein the claim relates
to property damage.
34. The method according to claim 24, wherein the claim relates
to property loss.
35. The method according to claim 24, wherein the claim relates
to theft.
36. The method according to claim 24, further comprising the step
of: (e) closing the account after a predetermined amount of time.
37. The method of claim 36, further comprising the step of: before
step (e), reimbursing the insured any money remaining in the account.
38. The method of claim 24, wherein the card account is managed
by an independent claim service provider.
39. The method of claim 24, wherein the card account is managed
by an insurance company.
40. The method of claim 24, further comprising the steps of: (e)
collecting purchase information from the card account; and (f) entering
the purchase information into the database.
41. The method according to claim 40, wherein the purchase information
reflects an actual repair cost of an automobile and further comprising
the step of: (g) comparing the determined dollar value of the claim
to the actual repair cost of the automobile.
42. The method according to claim 40, wherein the information collected
in step (e) includes a time of purchase.
43. The method according to claim 40, wherein the information collected
in step (e) includes an amount of purchase.
44. The method according to claim 40, wherein the information collected
in step (e) includes a place of purchase.
45. The method according to claim 40, wherein the information collected
in step (e) includes a time, place, and amount of each purchase.
46. A method for administering insurance claims and monitoring
claim-related data in a database, comprising the steps of: (a) receiving
a claim; (b) determining a dollar value of the claim; (c) issuing
a bill-on-redemption card account funded with a point value corresponding
to at least a portion of said dollar value of the claim; (d) paying
at least some portion of the dollar value of the claim when the
card account is used by a card recipient; (e) collecting purchase
information from the card account; and (f) entering the purchase
information into the database.
47. The method according to claim 46, further comprising the step
of: (g) using the database to review purchase trends.
48. The method according to claim 46, further comprising the step
of: (g) using the database to review insurance investigations for
accuracy.
49. The method according to claim 46, wherein the card account
is a debit card account.
50. The method according to claim 46, wherein the card account
is a credit card account.
51. The method according to claim 46, wherein the claim relates
to Workman's Compensation.
52. The method according to claim 46, wherein the claim relates
to employee disability payments.
53. The method according to claim 46, wherein the claim is an insurance
claim.
54. The method according to claim 46, wherein the purchase information
reflects an actual repair cost of an automobile and further comprising
the step of: (g) comparing the determined dollar value of the claim
to the actual repair cost of the automobile.
55. The method according to claim 46, wherein the claim relates
to an automobile accident.
56. The method according to claim 46, wherein the claim relates
to medical treatment.
57. The method according to claim 46, wherein the claim relates
to death benefits.
58. The method according to claim 46, wherein the claim relates
to property damage.
59. The method according to claim 46, wherein the claim relates
to property loss.
60. The method according to claim 46, wherein the claim relates
to theft.
61. The method according to claim 46, wherein the information collected
in step (e) includes a time of purchase.
62. The method according to claim 46, wherein the information collected
in step (e) includes an amount of purchase.
63. The method according to claim 46, wherein the information collected
in step (e) includes a place of purchase.
64. The method according to claim 46, wherein the information collected
in step (e) includes a time, place, and amount of each purchase.
65. The method according to claim 46, further comprising the step
of: (g) closing the account after a predetermined amount of time.
66. The method of claim 65, further comprising the step of: before
step (g), reimbursing the insured any money remaining in the account.
67. The method of claim 46, wherein the card account is managed
by an independent claim service provider.
68. The method of claim 46, wherein the card account is managed
by an insurance company.
69. The method according to claim 46, wherein the determination
of the dollar value of the claim received in step (b) was made by
an insurance adjuster; wherein the purchase information collected
in step (e) includes the actual amount spent on repairing an automobile;
and further comprising the steps of: (g) comparing the dollar value
of the claim to the actual amount spent on repairing the automobile;
and (h) evaluating the performance of the insurance adjuster.
Insurance Description
CROSS-REFERENCE TO RELATED APPLICATIONS
[0001] The present application is a continuation-in-part of U.S.
patent application Ser. No. 09/930,418 filed 15 Aug. 2001, which
is hereby incorporated by reference.
TECHNICAL FIELD OF THE INVENTION
[0002] The present invention relates generally to systems and methods
for data processing, and more particularly, to a system and method
for administration of insurance claims adjustment utilizing a card
for payment of claims.
BACKGROUND OF THE INVENTION
[0003] It is common for people to purchase insurance in order to
spread the risk of financial liability resulting from the occurrence
of an event covered by the insurance policy. For example, it is
very common for a person to carry automotive insurance coverage,
such that some or all expenses associated with an accident, such
as repair of the vehicle, will be borne by the insurance company.
In fact, in many places such insurance coverage is mandated by law.
Such insurance coverage may be offered by insurance companies because,
while the benefits paid by the insurance company for some of the
insureds will greatly exceed the amounts paid by these insureds
for their policies, the majority of the insureds will pay more for
their policies than they will receive in benefits from the insurance
company. In this way, the total group of insureds is spreading the
risk for liability for the entire group's repair costs.
[0004] Whenever an insured desires to receive payment from the
insurance company to cover some or all of the cost of automotive
repair, the insured is required to submit a claim to the insurance
company. This claim is then evaluated by the insurance company,
which then makes a determination as to whether the insurance company
will provide a payment and, if so, how much of the total cost of
the repair bill the insurance company will pay for. For example,
many insurance policies include deductibles which must be met by
the insured before the insurance company begins to assume financial
liability for repairs. Such deductibles can be on a per incident
basis, a yearly basis, etc. After the deductible has been met by
the particular insured, some policies still do not pay the total
remaining cost of the repair, but instead may provide payments on
a cost-sharing basis with the insured. Other factors which may have
a bearing upon the amount paid by the insurance company include
per-occurrence maximums and maximums tied to the current "blue
book" value of the vehicle, both of which will cap the total
liability of the insurance company. Because of these factors, claims
submitted to an insurance company must go through a process known
as claim adjudication or adjustment. In the claim adjudication process,
the insurance company evaluates all of the claim data submitted
by the insured and makes a determination as to what benefits the
insurance company is willing to pay to the insured. The results
of the claim adjudication process are typically communicated to
the insured by means of a printed explanation of benefits (EOB)
statement.
[0005] Insurance companies process millions of claims a year; automotive
insurance alone is a multi-billion dollar industry. For each claim,
an insurance adjuster must first determine the estimated value of
the damage to the vehicle, which is presumably substantially the
cost of the repair. The insurance company then cuts a check in that
amount (less any applicable deductibles, etc. . . . ) and mails
it to the insured. Once the insured receives the check, it is up
to the insured to decide what to do with the money. The insured
may decide to repair the vehicle or they may decide it is preferable
to live with the damage to the vehicle and use the money for other
purposes. Once the check is cashed, the insurance company has no
way of knowing how the money was spent, or even how much the repairs
actually cost. Information regarding the actual repair cost (i.e.,
how accurate the adjuster was) would be of particular interest to
the insurance company, as well as would information relating to
the demographics regarding individual and regional spending patterns
and repair choices.
[0006] Each check cut by the insurance company has a processing
and delivery cost associated therewith. There is also a "float"
period between when the check is cashed and when the money is spent.
During the float period, the money resides with the insured. The
cost of a typical claim is relatively high for payer organizations
(i.e. insurance companies)--an average of several dollars per claim
to price, adjudicate, and issue a check and an EOB. In addition,
there is a loss of interest dividends during the "float"
period, which is small on a per claim calculation but great in aggregate.
Furthermore, there are instances where the claim amount adjudicated
by the insurance company is greater than the actual cost to repair
the automobile, which represents a loss to the insurance company.
The result is that the costs associated with claims processing and
adjustment are non-trivial for the insurance company. Even at its
most efficient, claims processing today is a multi-billion dollar
industry.
[0007] From the above, it is apparent that the claims adjudication
process adds a significant amount of cost to the insurance provider,
which is reflected as rising premiums for the consumer. Moreover,
the current adjudication process provides little feedback to the
insurance provider regarding how claim checks cut to the insured
are spent. There is therefore a need for an insurance claim adjudication
process that is much more administratively efficient than the current
system and which provides some feedback information to the insurance
company. A solution to this problem has thus far eluded those skilled
in the art.
SUMMARY OF THE INVENTION
[0008] The present invention provides an insurance claim disbursement
system adapted to provide feedback information relating to the spending
patterns of the claimants. According to one aspect of the invention,
a method for administering insurance claims and monitoring claim-related
data in a database is provided. The method includes providing a
database in which to store information relating to the spending
patterns of the claimants. Claims from insured policyholders are
received by an insurance provider. The insurance provider first
investigates the claim, and then determines a dollar value to attach
to the claim. A card-accessible account is funded with the dollar
value of the claim and issued to the insured. As the card account
is used to make purchases, purchase information from the card account
is collected. The collected information is entered into the card
account database, and subsequently analyzed to investigate such
phenomena as spending habits of policyholders (both individually
and in aggregate), the accuracy of the insurance investigators upon
whose reports the dollar value determination of the claim was made,
average prices for goods and services purchased by the policyholders,
and the like.
[0009] One object of the present invention is to provide an improved
insurance claim investigation and disbursement system. Other objects
and advantages of the present invention will be apparent from the
following description of the preferred embodiment.
BRIEF DESCRIPTION OF THE DRAWINGS
[0010] FIG. 1 is a schematic process diagram of a preferred embodiment
insurance claim submission, adjudication and payment system of the
present invention.
DESCRIPTION OF THE PREFERRED EMBODIMENT
[0011] For the purposes of promoting an understanding of the principles
of the invention, reference will now be made to the embodiment illustrated
in the drawings and specific language will be used to describe the
same. It will nevertheless be understood that no limitation of the
scope of the invention is thereby intended, such alterations and
further modifications in the illustrated device, and such further
applications of the principles of the invention as illustrated therein
being contemplated as would normally occur to one skilled in the
art to which the invention relates.
[0012] The insurance claims adjudication system according to one
aspect of the present invention will be described with reference
to FIG. 1. Referring to FIG. 1, there is illustrated a preferred
embodiment process flow of the system and method of the present
invention. The preferred embodiment is illustrated herein using
an accident claim against an automobile insurance policy as the
exemplary model of how the system works; however, as discussed in
greater detail hereinbelow, those of ordinary skill in the art will
recognize that the system and method of the present invention will
lend itself for use in a variety of different applications across
the insurance gamut as well as in other business applications. Other
insurance scenarios include, for example, but not by limitation,
property damage (i.e., houses, vehicles, personal property and the
like), fire and/or theft loss, mysterious disappearance, death or
disability benefits, medical treatment, and the like. Also, the
system and method of the present invention could be readily applied
to third party claims, such as wherein the policyholder is sued
for damages resulting from negligence, trespass, and the like. References
to automobile insurance, automobile accidents, car repair bills,
repair shops, mechanics, and the like are presented herein for illustrative
purposes and are not intended to limit application of the present
invention to any particular type of insurance or business.
[0013] FIG. 1 illustrates one embodiment process of the present
invention, an insurance claims adjudication system using a debit
card, credit card, smart card or the like as a vehicle for disbursing
compensations to policyholders having valid and adjusted claims.
It should be noted that while the following example contemplates
payments made to policyholders, the system and method of the present
invention also fully encompasses payments made to anyone arising
from an insurance claim, including non-policyholder insureds (such
as spouses, dependent children, etc. . . . ), injured third party
claimants, and the like. Likewise, while the following example discusses
an insurance company as the payee, the present invention also encompasses
a non-insurance company claim service provider as the payee.
[0014] Beginning at step 10, the insurance company receives a claim
from an insured policyholder. For the purposed of this example,
the claim will be taken to be damage to an automobile covered by
an insurance policy, in the form of a dented fender. Upon receipt
of the claim from the policyholder, the insurance company assigns
an adjuster (step 20) to investigate the claim. The adjuster is
presumed to have some quantum of expertise in the field, and is
capable of making an independent evaluation of the claim by assessing
the degree of damage to the car, the complexity and feasibility
of the repair, and the potential costs involved. In the next step,
step 30, the adjuster proceeds to investigate the claim. Upon completion
of his investigation, the adjuster will make a determination of
the value of the claim (step 40). The adjuster will take into account
the degree of damage to the car and estimate the cost of the repair.
While different adjusters working for different insurance companies
will be subject to different criteria and parameters imposed by
their respective employers, the main points of the adjustment process
are essentially the same. The adjuster will arrive at a dollar value
to assign to the claim in step 40.
[0015] Once a non-zero dollar value for the claim has been determined,
the insurance company will open a card-accessible account, such
as a debit card account for the policyholder, according to step
50. The card account may be managed through a bank or other like
financial institution, through a non-bank third party, or may be
managed directly through the insurance company. In a preferred embodiment,
the card account is a debit card account, wherein the associated
debit card accesses a bill-on-redemption debit card account managed
by a third party, where funds are routed from the insurance company
to the third party through an automated clearinghouse (ACH) each
day to pay for that day's claim redemptions through the debit card
accounts. Other alternate embodiments contemplate the use of other
types of accounts, such as charge or credit card accounts. The third
party making the payments would therefore receive the benefit of
temporarily holding the money for each funded account (the "float")
until the card is actually used. This could represent a significant
benefit, since the third party company could easily be in receipt
of millions of dollars of float at any given time. In step 60, the
insurance company will fund the debit account with the dollar value
of the claim. The amount assigned to any single debit card may be
limited according to claims of a certain predetermined type, to
claims of a certain type, or the like. In step 70, the insurance
company will issue a debit card to the insured upon which the repairs
may be charged.
[0016] According to step 80, the insurance company collects information
regarding to how the debit account was used. Information so collected
includes how many payments were made on the account, how much each
payment was for, who each payment was made to, when each payment
was made, how much money currently remains in the account, and the
like. This information may be readily entered into one or more databases
maintained by the insurance company. This data entry process is
step 90.
[0017] It should be understood that the database may be integrated
into a system of the insurance provider or, alternatively, the database
may be a stand alone computer system that is connected directly
to the insurance providers computer system, connected to a local
area network or connected to a global computer network. The database
may also be provided and maintained by the financial institution
or non-bank third party providing and managing the debit account,
if it is not managed directly by the insurance provider. The database
may also be a stand alone computer system managed by a third party
for the insurance providers or for the debit account managers, if
any.
[0018] Preferably, the data collection and entry processes 80 are
automated, and more preferably the data collection and entry are
done as a computer-to-computer communications step over secure lines,
such as via modem or networked computers (i.e., for example, a global
computer network). The data may then be collated and analyzed according
any desired mathematical/statistical models that may be of interest
at step 100. In other words, once collected, the spending information
may be used by the insurance company as it sees fit.
[0019] For example, while it is assumed that the policyholder will
use the debit card to pay the repair bill, this is not always the
case. In some instances, the damage may be minor or merely cosmetic,
and the policyholder may decide that it is more advantageous to
live with the reduced value of the damaged vehicle and use the claim
money for other things. In other instances, the policyholder may
desire to keep the car until it wears completely out, making the
car's resale value moot and minor repairs less urgent. In still
other instances, the policyholder may have already paid for repairs
out of pocket, and the claim money is merely reimbursement. In any
event, the insurance company may have an interest in collecting
information 80 regarding how the money it disburses to the policyholder
is spent, including where it is spent, upon what it is spent, and
when/how soon it is spent. By analyzing spending trends 90, the
insurance company may gain better insight into the individual policyholder's
custom wants and needs, as well as those of certain classes of policyholders
in aggregate. The insurance company may therefore better position
itself to take advantage of heretofore unknown or underestimated
business opportunities while simultaneously better serving its customers.
[0020] Another point of interest to the insurance company is the
accuracy of the adjuster. The insurance company has a strong interest
in assessing how accurate their adjusters are, since the adjuster's
assessment of a claim directly influences how much the insurance
company pays out for that claim. If the adjuster consistently overestimates
the value of claims, the insurance company overpays the policyholders
and consistently looses money. Likewise, if the adjuster consistently
underestimates the value of claims, the result is cumulative alienation
of existing policyholders, as well as repair shops and mechanics,
which can lead to a bad reputation for the company, decreased business,
and, again, lost revenues for the company. Therefore, the insurance
company has an interest in making sure the adjusters are performing
according to the insurance company's expectations. Unlike in the
case of a check sent to the policyholder, if a debit card is used
to pay for repairs, the actual cost of the repair bill is easy to
learn and track. The collected information may be readily collated
by adjuster and analyzed 90 to access the individual adjuster's
accuracy.
[0021] It should be recognized that this system will work with
any type of adjustment process wherein money is disbursed directly
to the claimant, and is not limited to automobile insurance and/or
automobile repairs.
[0022] According to another embodiment of the present invention,
insurance refunds and/or rebates are disbursed via debit card accounts,
rather than through conventional bank checks. Once again, this allows
the insurance company to monitor, record, and analyze data indicative
of the spending habits of its clientele.
[0023] According to still another embodiment of the present invention,
the purchase information collected in the database is used identify
service providers that could be defrauding the insurance company
and its clientele. The data may be analyzed 100 to identify providers
whose charges vary beyond a threshold amount for the same or similar
services or who consistently charge substantially more than their
competitors for the same services. While not conclusive proof of
misconduct, such information could be sufficient to trigger an investigation
into the business practices of suspect providers.
[0024] According to yet another embodiment of the present invention,
the debit account may be programmed to expire after a predetermined
length of time. For instance, the debit account may be programmed
to expire 30 days after its value decreases below a certain threshold
limit, such as, for example, one dollar. The remaining funds may
be sent to the policyholder automatically, upon request, applied
to future premiums, or otherwise disposed. Alternately, the maximum
value of the debit account may be capped at some convenient amount
as a theft prevention measure (i.e., loss or theft of the debit
card). Large claims would then require a plurality of accounts opened
and debit cards issued to the claimant.
[0025] It will be understood by those skilled in the art that the
bill-on-redemption manner of loading a debit or credit card product
described hereabove is accomplished by loading points onto the card
as a non-monetary transaction and thereby creating an open-to-buy
limit on the card. When the card holder uses the card to make a
purchase, the points are redeemed and the merchant is paid in the
manner further described previously, thereby enabling the sponsoring
company making the payments to use the funds until the settlement
process occurs.
[0026] As described hereinabove, the insurance claims adjudication
system of the present invention applies to a variety of insurance
scenarios such as disability benefits and medical treatment. A specific
example of disability benefits includes payments to an employee
through the employer's disability policy. A specific example of
payments for medical treatment includes payments to an employee
for Workman's Compensation claims.
[0027] In still another embodiment of the present invention, insurance
payments that require ongoing payments for a period of time are
disbursed as loads onto a debit or credit card product. As one example,
employee disability benefits as described previously are disbursed
to the employee as ongoing loads onto the debit or credit card product
that was issued to them for payment of the benefits. This eliminates
the need to receive checks through the mail and deposit the checks.
[0028] While the invention has been illustrated and described in
detail in the drawings and foregoing description, the same is to
be considered as illustrative and not restrictive in character,
it being understood that only the preferred embodiment has been
shown and described and that all changes and modifications the come
within the spirit of the invention are desired to be protected.
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