A method for assessing, pricing, and provisioning distance-based
vehicle insurance is disclosed. Receiving identification information
of a customer and an associated vehicle, a current odometer reading
of the vehicle, and a garaging location of the vehicle is disclosed.
The customer is provided with a quote including a policy rate identifying
a cost per distance unit based on the customer and vehicle identification
information and the garaging location. Performing a purchase transaction
for an insurance policy in response to the customer selecting one
of the items for purchase, wherein coverage provided by the insurance
policy expires based on the earlier of an odometer expiration value
occurring and a predetermined time limit is disclosed. The expiration
odometer value is the sum of the current odometer reading and the
total number of distance units included in the selected item. The
current odometer reading is not audited prior to or during the purchase
1. A method for assessing, pricing, and provisioning distance-based
vehicle insurance, the method comprising: receiving identification
information of a customer and an associated vehicle; receiving a
current odometer reading of the vehicle and a garaging location
of the vehicle; providing a plurality of coverage types to the customer;
providing the customer with at least one quote upon receiving a
selection from the customer of one of the coverage types, wherein
the quote includes a policy rate identifying a cost per distance
unit based on the customer and vehicle identification information
and the garaging location; providing the customer with a plurality
of pre-calculated items based on the quote, wherein each item includes
a total number of distance units for purchase at the policy rate;
and performing a purchase transaction for an insurance policy in
response to the customer selecting one of the items for purchase,
wherein coverage provided by the insurance policy expires based
on the earlier of an odometer expiration value occurring and a predetermined
time limit; wherein the expiration odometer value is defined as
the sum of the current odometer reading and the total number of
distance units included in the selected item, and wherein the current
odometer reading is not audited prior to or during the purchase
2. The method of claim 1, further comprising assessing a policy
fee as a cost per unit distance.
3. The method of claim 1, wherein the step of receiving a current
odometer reading of the vehicle further comprises receiving an odometer
reading of the vehicle from the customer.
4. The method of claim 1, further comprising: receiving an updated
odometer reading of the vehicle; calculating whether the updated
odometer reading is within a predefined number of distance units
from the expiration odometer value; and notifying the customer if
the updated odometer reading is within the predefined number of
5. The method of claim 4, wherein the updated odometer reading
is received from at least one of emission testing of the vehicle,
maintenance of the vehicle, sale of the vehicle, purchase of the
vehicle, registration of the vehicle, and an accident record of
6. The method of claim 4, wherein notifying the customer includes
offering the customer a renewal option to purchase additional insurance.
7. The method of claim 1, further comprising: calculating whether
the present time is within a predetermined amount of time of the
predetermined time limit; and notifying the customer if the present
time is within the predetermined amount of time.
8. The method of claim 7 wherein notifying the customer includes
offering the customer a renewal option to purchase additional insurance.
9. The method of claim 1, further comprising: prior to renewing
the policy, determining whether a current odometer reading at the
end of the predefined period of time is greater or lesser than the
expiration odometer value; and charging the customer for the difference
between the current odometer reading and the expiration odometer
value if the current odometer reading is greater, and crediting
the customer for the difference between the current odometer reading
and the expiration odometer value if the expiration odometer value
10. A method of providing automobile insurance, the method comprising:
receiving customer information from a customer; receiving automobile
information from the customer, the automobile information including
a first, customer-supplied odometer reading of an automobile and
a garaging location of the automobile; determining a rate based
upon the customer information and the automobile information; offering
at least one insurance policy option, the at least one option including
an offer to insure the automobile at a cost per unit distance of
coverage; receiving a customer selection of a number of units of
distance of coverage; assessing a policy fee for insuring the customer
and automobile based on a cost per unit distance; receiving a payment
for the number of units of distance of coverage and the policy fee,
the payment based on a total cost per unit distance, the total cost
per unit distance including the cost per unit distance of coverage
for insurance and the policy fee; and insuring the customer and
automobile while a current odometer reading of the automobile is
less than the sum of the first odometer reading and the customer
selection of a number of units distance of coverage and while a
predetermined period of time has not lapsed; wherein an odometer
audit is not performed prior to initiating coverage for the automobile
11. The method of claim 10, wherein the step of offering at least
one insurance policy option further comprises offering a plurality
of coverage limits.
12. The method of claim 11, wherein the step of offering at least
one insurance policy option further comprises offering a coverage
limit satisfying minimum legal requirements in a predetermined jurisdiction,
plus at least one option with coverage surpassing the minimum requirements
in the predetermined jurisdiction.
13. The method of claim 10, further comprising obtaining an odometer
audit before paying an insurance claim resulting from insuring the
customer and automobile.
14. The method of claim 10, wherein no odometer tracking device
is placed on the vehicle.
15. The method of claim 10, further comprising denying a claim
based on an event occurring following the earlier of a current odometer
reading of the automobile being greater than the sum of the first
odometer reading and the customer selection of a number of units
distance of coverage, and the lapse of the predetermined period
16. The method of claim 10, further comprising providing a notice
to the customer prior to the earlier of a current odometer reading
of the automobile being greater than the sum of the first odometer
reading and the customer selection of a number of units distance
of coverage, and the lapse of the predetermined period of time.
17. A system for assessing, pricing, and provisioning distance-based
vehicle insurance, the system comprising: a processor; a memory
accessible to the processor, the memory configured to store information
associated with a plurality of distance-based insurance options;
a display device coupled to the processor and configured to display
information selected by the processor to a user; an input device
coupled to the processor and configured to receive information entered
by the user; and a plurality of instructions executable by the processor,
including: instructions for receiving user and vehicle information
via the input device, including a current odometer reading of the
vehicle; instructions for determining an actuarial rate class based
on the user and vehicle information; instructions for providing
a plurality of coverage types to the user via the display device;
instructions for providing the user with at least one quote upon
receiving an input selecting one or more of the coverage types,
wherein the quote includes a total number of distance units for
purchase and a policy rate identifying a cost per distance based
on the user and vehicle identification information, actuarial rate
class, and predetermined expiration date of the policy; and instructions
for performing a purchase transaction in response to input from
the user indicating a purchase for insurance corresponding to the
18. The system of claim 17, wherein the plurality of instructions
executable by the processor further includes instructions for receiving
a garaging location of the vehicle; and wherein the cost per distance
is further based on the garaging location.
19. The system of claim 17, wherein the cost per distance is further
based on the assessment of a policy fee as an additional cost per
20. The system of claim 17, wherein the processor and memory are
located in a remote location relative to the display device and
input device, and are connected to the display device and input
device via a communications network.
CROSS REFERENCE TO RELATED APPLICATIONS
 This application is a continuation-in-part of U.S. patent
application Ser. No. 10/977,712, filed Oct. 29, 2004, which is hereby
incorporated by reference. This application claims the benefit of
U.S. Provisional Patent Application No. 60/803,837, filed Jun. 2,
2006, which is hereby incorporated by reference.
BACKGROUND OF THE INVENTION
 Conventional methods for pricing and selling vehicle insurance
are generally based upon time periods (e.g., months or years), also
known as terms. An applicant's data, such as age, sex, location
of residence, and driving record are combined with other factors
to create an actuarial class, which is then used to arrive at a
price. This price is then associated with a unit of exposure. In
conventional insurance, the unit of exposure is a period of time
(a term). As the insurance contract is then principally defined
based upon the exposure unit, conventional insurance contracts are
principally defined by the term. However, such conventional insurance
mixes a fixed cost with a variable usage pattern. Among other disadvantages,
this approach penalizes low mileage customers.
 Accordingly, what is needed is an improved system and method
for addressing such issues.
BRIEF DESCRIPTION OF THE DRAWINGS
 FIG. 1 is a flowchart of one embodiment of a method for
assessing, pricing, and provisioning distance-based vehicle insurance.
 FIG. 2 is a diagram of one embodiment of a system within
which the method of FIG. 1 may be implemented.
 FIG. 3 is a flow chart of one embodiment of a method for
using the system of FIG. 2.
 FIGS. 4-8 are exemplary screenshots illustrating various
displays of the system of FIG. 2.
 FIG. 9 is a flowchart of one embodiment of a method for
calculating and applying a credit for a referral.
 FIG. 10 is a flowchart of one embodiment of a method for
determining whether an insurance policy is about to expire and notifying
the customer of the upcoming expiration.
 FIG. 11 is an exemplary windshield sticker that may be generated
by the method of FIG. 10.
 FIG. 12 is a diagram of one embodiment of a system within
which the method of FIG. 10 may be implemented.
 FIG. 13 is a flowchart of one embodiment of a method for
calculating a premium for use in processing a claim based on an
expired insurance policy.
 FIG. 14 is a diagram of a portion of one embodiment of a
distance-based insurance policy.
 FIG. 15 is a diagram of a portion of one embodiment of an
adjusted term insurance policy.
 FIG. 16. is a flowchart of one embodiment of another method
for assessing, pricing, and provisioning distance-based vehicle
 FIGS. 17-22 are exemplary screenshots illustrating various
displays that could be implemented by the system of FIG. 2 or other
systems according to the present disclosure.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS
 The present disclosure relates to a system and method for
the assessment, pricing, and provisioning of distance-based vehicle
insurance. However, it is understood that the following disclosure
provides many different embodiments or examples. Specific examples
of components and arrangements are described below to simplify the
present disclosure. These are, of course, merely examples and are
not intended to be limiting. In addition, the present disclosure
may repeat reference numerals and/or letters in the various examples.
This repetition is for the purpose of simplicity and clarity and
does not in itself dictate a relationship between the various embodiments
and/or configurations discussed.
 Referring to FIG. 1, in one embodiment, a computer implemented
method 100 may be used for providing distance-based insurance to
a user (e.g., a customer). As will be described later in greater
detail, the distance-based insurance enables variable use to be
paired with variable pricing, in contrast to conventional term insurance,
where a fixed cost is paired with variable usage. Accordingly, the
method 100 enables distance-based insurance to be purchased and
used like a utility, allowing costs to accurately reflect usage,
eliminating inefficient pricing, and creating consumer choice.
 Distance-based insurance may also improve the insurer's
risk management by aligning consumer pricing with the best predictor
of future insurance claims--vehicle mileage. Extensive research
on the relationship between annual mileage and insurance claims
suggest that if other risk factors (such as driver age, location,
and vehicle use) are constant, then accident risk tends to increase
in a roughly linear relationship with mileage. Distance-based insurance
may encourage beneficial risk-pool selection by being most advantageous
to low-mileage (and hence, lower risk) drivers.
 The method 100 begins by receiving customer and vehicle
identification information in step 102. The customer identification
information may include such information as driver's license number,
age, gender, and address. The vehicle identification information
may include such information as license plate number, vehicle identification
number (VIN), and vehicle make, model, and year. In step 104, a
current odometer reading of the vehicle is received. It is understood
that the odometer units (e.g., miles or kilometers) may differ depending
on such factors as the location of the vehicle or its origin. Furthermore,
it is understood that no odometer audit or verification is performed
by the insurance provider during the method 100, as shown in the
present embodiment. The odometer reading entered by the customer
is used as the current odometer reading.
 While the customer-provided odometer reading is all that
is needed in some embodiments to initiate or continue coverage,
odometer readings from other information sources may be used for
validation, verification, or for other purposes. Additional sources
may include records from state inspections, records from titling
or registration events, records from sale events, data from private
databases, data from internal databases, and possibly other sources.
 In step 106, multiple coverage types are provided to the
customer. Exemplary coverage types may include recommended, economy,
and minimal coverage. It is understood that some aspects of the
coverage types may be controlled by applicable state regulations.
In step 108, upon receiving an input selecting one of the coverage
types, the customer is provided with at least one quote. The quote
includes a policy rate identifying a cost per distance unit (e.g.,
$0.05/mile) based on the customer and vehicle identification information.
Accordingly, the cost per mile includes various factors based on
a risk assessment.
 In step 110, the customer is provided with multiple pre-calculated
items based on the quote. Each of the pre-calculated items includes
a total number of distance units for purchase at the policy rate.
For example, one item may provide 5000 miles of coverage for $250
(i.e., $0.05*5000), while another item may provide 6000 miles of
coverage for $300 (i.e., $0.05*6000). It is understood that various
alterations may be made in the calculations to provide, for example,
an incentive for a customer to purchase additional miles. For example,
the policy rate may be reduced to $0.049 upon the purchase of 10,000
miles. In step 112, a purchase transaction for an insurance policy
may be performed in response to input from the customer selecting
one of the items for purchase. The insurance policy includes an
expiration odometer value defined as the sum of the current odometer
reading and the total number of distance units included in the selected
item. Accordingly, the method 100 enables a distance-based vehicle
insurance policy to be purchased without a physical inspection of
the odometer reading by the insurer prior to purchase, and without
the use of odometer audits or verifications, or any type of tracking
device placed in the vehicle.
 While, in some embodiments, the methods of the present disclosure
are meant to increase convenience to the customer by not requiring
physical odometer inspections, audits, or tracking devices, this
does not necessarily preclude the use of odometer readings from
sources such as state inspections for purposes such as validation
or verification. In one embodiment, the customer provided odometer
reading may be checked for consistency against outside sources.
For example, a customer-provided odometer reading for a given vehicle
that is lower than an odometer reading obtained at a previous inspection
or similar event would indicate that the customer has made a mistake,
is attempting to defraud the insurance company, or has been the
victim of odometer fraud. By verifying customer provided readings
against outside sources, these problems may be appropriately addressed.
In some embodiments a notice may be provided to the customer informing
him or her of the discrepancy. Coverage may be cancelled if it is
determined that the customer has purposefully misrepresented the
odometer reading. In other cases, the customer may be alerted to
odometer fraud and the decision may be made to extend or continue
coverage. In another case, an odometer reading may be obtained from
an outside source that would indicate that the customer's insurance
policy has already lapsed. In this case, the customer may be notified
and possibly given the opportunity to renew. As described herein,
this additional data can be used to more accurately predict when
a given customer is nearing a lapse in insurance coverage. In turn,
more accurate warning notices of impending lapses in coverage may
 Referring to FIG. 2, a system 200 illustrates one embodiment
of a system that may be used to provide distance-based vehicle insurance.
For example, the method 100 of FIG. 1 may be implemented within
the system 200. In the present example, the system 200 includes
a kiosk 202 at which a user (not shown) may price, select, and purchase
distance-based insurance. It is understood that other systems (e.g.,
a website) may provide similar functionality.
 The kiosk 202 includes a number of components to provide
information to the user and to receive and process input from the
user. For example, the kiosk 202 may include a central processing
unit (CPU) 204 coupled to a memory unit 206, an input/output ("I/O")
device 208, a network interface 210, a printer 212, and a magnetic
stripe reader (MSR) 214. The network interface may be, for example,
a modem (e.g., a V.90 modem) and/or one or more network interface
cards (NICs) that are each associated with a media access control
(MAC) address. The network interface 210 may be compatible with
any of a variety of wireline and wireless network technologies,
such as TCP/IP and/or Bluetooth. The components 202, 204, 206, 208,
210, and 212 are interconnected by a bus system 216, which may include
wireless and/or wired communication paths.
 The components may be located in a single storage unit in
the kiosk 202 or may be configured in many different ways. For example,
the CPU 204, memory unit 206, I/O device 208, and network interface
210 may be located within the kiosk 202 as part of a single computer,
and the printer 212 and MSR 214 may be attached as peripherals.
In addition, it is understood that each of the listed components
may actually represent several different components. For example,
the CPU 204 may represent a multi-processor or a distributed processing
system; the memory unit 206 may include different levels of cache
memory, main memory, hard disks, and remote storage locations; and
the I/O device 208 may include monitors, keyboards, touch screen
displays, and the like. The printer 212 may be one or more printers
and may utilize thermal printing or other suitable printing technologies.
For example, the printer 212 may represent a thermal printer for
vinyl stock and another thermal printer for coated paper stock.
 The network interface 210 may be connected to a network
218. The network 218 may be, for example, a subnet of a local area
network, a company wide intranet, and/or the Internet. Because the
network interface 210 may be connected to the network 218, certain
components may, at times, be shared with other computers (not shown).
Therefore, a wide range of flexibility is anticipated in the configuration
of the kiosk and its components. Furthermore, it is understood that,
in some implementations, CPU 204 may act as a server to other computers.
 Coupled to the kiosk 202 via the network 218 is a server
220. The server 220 may be one of a plurality of servers and may
be selected for handling a particular user's request by a network
device such as a router (not shown). The router may handle all communication
requests by delegating them in round-robin fashion (or using another
allocation/load balancing process) amongst the servers. The server
220 is coupled to or includes an actuarial engine 222, which utilizes
information stored in a database 224. The actuarial engine 222 and
database 224 may be used to determine an actuarial class for the
customer as well as an associated price per mile, as will be described
later. The server, which includes a processor and memory (not shown)
may execute software instructions needed to access the actuarial
engine 222 and database 224, as well as to communicate with the
CPU 204. In some embodiments, the server 220 may host all or part
of a website comprising various web pages and/or executable code
for providing similar functionality to that of the present example.
 The CPU 204 includes a plurality of software instructions
for an operating system that handles peripheral device communication,
network communication, and hosts a local point-of-sale (POS) application
for customer use. The CPU 204 and its associated components may
communicate all customer information and selections over the network
218 to the server 220, or the CPU 204 may perform some or all processing
 In operation, a customer interacts with the kiosk 202 via
the touch screen display 208, which allows the customer to both
read and enter data (the latter by use of an onscreen keyboard).
When queried by the POS application for driver's license information,
the customer swipes his driver's license in the MSR 214 (assuming
the driver's license includes a magnetic stripe containing such
information). When queried by the POS application for credit card
information, the customer swipes his credit card in the MSR 214.
If the customer agrees to a policy, the printer 212 prints a vinyl
static-cling reminder sticker for the policyholder's windshield.
Additionally, the printer 212 prints two proof-of-insurance cards
on coated paper for the customer.
 In some embodiments, the kiosk may include wireless (e.g.,
Bluetooth) capability to enable interaction with the customer's
cellular telephone. For example, during a payment step in the purchasing
process, the customer may elect to purchase the insurance via the
cell phone. Cell phones have unique identifier numbers (e.g., an
international mobile subscriber identify (IMSI) number) that allows
for their cellular network identification. This number may also
be used for unique identification for payment transactions. A customer
may, for example, purchase insurance and have it added to their
cell phone bill.
 The use of a cell phone also enables a customer to transmit
electronic coupon offers to the kiosk. These coupon offers could
be part of a larger marketing campaign wherein the customer receives
insurance coupons/credits at participating businesses.
 The use of a cell phone may also enable the customer to
conveniently transmit the phone number of a referrer (e.g., another
customer who has referred the current customer for the current purchase).
The phone number may then be used as a unique identifier (UID) for
a referral credit. For example, the customer may scroll through
their cell phone's address book looking for the name of the person
who referred them to the kiosk 202. Next to each address entry may
be a keypad option to select the phone registry entry as "Referred
me for insurance." If the user presses the cell phone keypad
item, the relevant phone number for the displayed address entry
is transmitted to the kiosk 202. The kiosk 202 may be configured
to acknowledge the receipt of the referrer number over the network.
 Referring now to FIG. 3 and with additional reference to
FIGS. 4-8, a method 300 illustrates a more detailed example of how
a customer may purchase a distance-based vehicle insurance policy
using an interactive system such as the system 200 of FIG. 2. In
the present example, the customer is a new customer who was referred
by an existing policyholder/customer.
 In step 302 and with additional reference to screenshot
400 of FIG. 4, the customer approaches the kiosk 202 and enters
his or her driver's license by swiping it through the MSR 214 or
entering the number via the touch screen 208. The system 200 may
use the driver's license number to retrieve the customer's name,
age, address, driving record, registered vehicles, and similar information.
It may also be used for a limited criminal history check. If the
consumer is a returning customer, all of the previous policy information
may be loaded based upon the license number and a confirmation key,
and the consumer may then modify any existing information and selections.
In step 304, the customer enters the license plate number of the
vehicle he wants to insure. The license plate number may be used
to retrieve the vehicle identification number (VIN), vehicle make,
vehicle model, vehicle color, and vehicle age. It may also be used
to determine if differences exist between the driver's license information
and vehicle registration information. The VIN may be used to check
the vehicle history.
 In step 306, the customer enters the current odometer reading
of the vehicle, which provides the starting point for vehicle coverage
(if a policy is purchased). In step 310, if there are secondary
drivers (as determined in step 308), the customer enters the drivers'
license numbers of the secondary drivers. As with the customer's
driver's license number, this information may be used to retrieve
the secondary drivers' names, ages, addresses, driving records,
and registered vehicles, as well as for a limited criminal history
check. In the present example, secondary drivers listed with a registered
address different than the primary driver's (e.g., the customer)
are not permitted.
 In step 312 and with additional reference to screenshot
500 of FIG. 5, the customer chooses from three coverage lines (e.g.,
"Recommended," "Economy," and "Minimum")
using a radio-button set. In the present example, the three coverage
choices improve transaction speed and make the process more intuitive
for the consumer, as well as simplifying the management of risk-pools.
It is understood that more or fewer coverage choices may be used,
and that each coverage choice may be more or less complicated. In
step 314, the customer may also select from additional coverage
options (e.g., "Collision," "Comprehensive,"
and "Roadside Assistance") using checkboxes as illustrated
in FIG. 5. These are coverages that are not legally required, although
some lienholders may require them to secure the vehicle collateral.
For both the coverage lines and the coverage options, the cost per
mile is illustrated to the customer. The cost-per mile is based
on the entered customer and vehicle information and an actuarial
rate class with which the customer is matched by computer (e.g.,
the server 220 of FIG. 2). The actuarial rate class is based solely
on age, sex, location (e.g., residence address or driving region),
and vehicle type in the present example, but it is understood that
other factors may be used.
 In step 316 and with additional reference to screenshot
600 of FIG. 6, the customer is presented with an insurance quote
in the form <currency unit>/<distance unit>. In the
present example, the quote is for $0.056/mile, which is the summation
of the customer selected "Recommended" coverage line,
and the additional coverage options "Collision" and "Comprehensive"
(as priced in FIG. 5). The customer chooses the amount of insurance
coverage by selecting from a list of pre-calculated items. For instance,
the pre-calculated item in FIG. 6 offers $5000 miles of insurance
for $280 (at $0.056/mile). Additional menu items (not shown, but
selectable using the up/down arrows in FIG. 6) may be provided for
predefined increments up to a maximum available number of miles
(e.g., 1000 mile increments up to 25000 miles). This approach allows
consumers to see the cost savings relative to their term-based insurance
plans. It also allows them to see a direct impact for reduced mileage
in the future. The pre-calculation is also very convenient and intuitive
as a user interface.
 In step 318 and with additional reference to screenshot
700 of FIG. 7, the customer is presented with a electronic payment
screen and may swipe his credit card in the MSR 214 or enter the
credit card information via the touch screen 208. This approach
provides not only payment information, but also provides a last
validation check for corroboration of the address/name information
from the driver's license or provided by the customer with the credit
card issuer's records. Assuming a successful validation, immediate
payment may be received from the customer without having to incur
the clearance/handling costs of cash or personal checks.
 It is understood that not every customer utilizing the systems
and methods disclosed herein will qualify for insurance coverage.
For example, those who have been found to have driven under the
influence of alcohol or while intoxicated may not qualify for coverage.
In some embodiments, drivers under 18, drivers without a car, drivers
who do not live and/or work in a specified state, drivers without
licenses or with expired licenses, drivers with adverse prior claims
history, and drivers utilizing their cars for business may also
be disqualified. Those skilled in the art will also recognize other
risk factors, circumstances, and legal considerations that may disqualify
a driver from obtaining coverage utilizing the systems and methods
 Similarly, some circumstances may lead an insurer utilizing
the systems and methods of the present disclosure to require a live
representative or agent to evaluate particular cases. These cases
may fall outside the ambit of the automated systems and methods
disclosed herein, but insurance may ultimately be provided following
review. In such cases, the information obtained by the automated
systems and methods disclosed herein may be used for the evaluation.
In other embodiments, the information obtained may be supplemented
or replaced by additional information obtained by the live representative
or agent. If insurance coverage is granted for such exceptional
cases, the customer may be required to continue to deal with the
live agent or may be returned to the automated systems and methods
 Referring again to FIG. 3, in step 320, a determination
may be made as to whether the customer was referred by an existing
customer. If so, in step 322, the customer enters a referral UID
of the referring customer. The referral UID is used to calculate
the credit to the referrer, as will be described later in greater
 In step 324 and with additional reference to FIG. 8, the
customer completes the financial transaction. Using the printer
212, two proof-of-insurance receipts are printed on paper cardstock.
The proof-of-insurance cards may also have a confirmation key which
can be used to speed future transactions by loading existing policy
data. Another printer may be used to print a static-cling windshield
reminder sticker (FIG. 11) on vinyl stock simultaneously with the
printing of the proof-of-insurance cards, or the first printer may
print the reminder sticker after printing the proof-of-insurance
cards. The customer may then collect the printed items and end the
session with the kiosk 202.
 Referring now to FIG. 9, in another embodiment, a method
900 may be used to calculate a credit (e.g., additional miles) for
an existing customer (a referrer) who refers a new customer and
credit the referrer's account with the calculated amount. In steps
902 and 904, a customer's policy purchase request and payment information
are received as described previously in greater detail with respect
to FIG. 3. In step 906, the UID of the referrer is received and,
in step 908, the new customer's payment is processed. In step 910,
the referrer's UID is used to link the referrer's account with the
new customer's account.
 In step 912, the credit that is to be added to the referrer's
account is calculated. In the present example, the credit is a distance-denominated
credit that provides additional miles of insurance coverage on the
referrer's existing policy. The credit may be calculated using a
formula such as: Number of Miles Credited to Referrer's Policy=((A
Percentage)*(Dollar value of new customer purchase))/(Referrer's
premium per mile). For example, with a percentage of 0.02, a dollar
value of $280 for the new customer's purchase, and a premium per
mile of $0.05 for the referrer, the credit to the referrer's account
will be 112 miles. In the present embodiment, the credited amount
is not redeemable for cash and only new, first-time customer purchases
will qualify towards a referral credit. An existing customer, by
referring multiple new customers for first-time purchases, may receive
multiple, cumulative credits. In step 914, the referrer's account
is credited with the calculated amount of miles. In some embodiments,
the credit may be "reserved" for a previous customer that
no longer has a current policy. If the referrer once again obtains
a current policy, the credit may be applied to the account. This
may be used, for example, to both encourage referrals and to encourage
a previous customer to purchase another policy.
 Referring now to FIG. 10, a method 1000 illustrates one
embodiment of a process for generating policy expiration/renewal
reminders. The method 1000 includes the use of collected odometer
readings, pricing multipliers, interactive reminders, and static-cling
windshield stickers. It is understood that not all of these approaches
may be used and that others may be added.
 In some embodiments, the purchase of distance-based insurance
creates a contract that is limited to a quantity of distance (e.g.,
"from the odometer reading 5000 miles up to and including the
odometer reading 7500 miles"). Accordingly, it may be desirable
to remind policyholders of approaching policy lapses to prevent
them from accidentally driving beyond their policy coverage. Additionally,
many consumers purchase a vehicle with the assistance of a lien,
and the lienholder often requires insurance coverage of the vehicle
to protect the collateral for the lien.
 In step 1002 and with additional reference to FIG. 11, a
static-cling windshield sticker 1100 may be generated when a customer
purchases a distance-based insurance policy (as in step 324 of FIG.
3). As illustrated in FIG. 11, the sticker may include such information
as the beginning and ending odometer readings of the insured vehicle,
as well as a phone number at which information regarding renewal
may be obtained.
 In addition to, or instead of the window sticker, the customer
may be sent reminders based upon, for example, estimated distance
traveled as follows. In step 1004, a baseline is established by
the customer's starting odometer reading at the time of purchase.
In step 1006, the policy end date is estimated using the customer's
average vehicle distance traveled (e.g., miles) for a given unit
of time. For example, if a policy is for 12000 miles and the average
driver travels 1000 miles per month, the estimated policy lapse
date is twelve months from the date the policy was purchased. The
estimated rate may also be calculated using the ownership records.
For example, if the vehicle was purchased by the policyholder two
years ago with an odometer reading of 30000 miles and the current
odometer reading is 78000 miles, then the policyholder travels approximately
2000 miles per month. In the absence of a more accurate rate, a
default rate may be applied.
 In step 1008, the estimated lapse date is updated with any
harvested odometer readings, which may come from such sources as
vehicle emissions tests, vehicle maintenance, vehicle sales, vehicle
purchases, vehicle registrations, and vehicle accident reports.
Any odometer readings that are harvested enable a more accurate
travel rate to be estimated for the particular customer.
 In step 1012, if the policy end date is near (as determined
in step 1010), the customer is sent a reminder (e.g., a letter or
an electronic reminder such as an email or text message) of impending
lapse of the policy (e.g., as defined either by time or by mileage).
This reminder directs the customer to use a communications device
(e.g., a cell phone, pager, or personal digital assistant) or to
go to a website, kiosk, or other interactive destination in order
to enter their current odometer reading. The entered odometer reading
may be used in step 1014 to further refine the predictive process
for the rate of vehicle travel and the associated lapse date. Over
a period of time, the method 1000 provides a more personalized rate
of travel for each policyholder. With fewer odometer readings, the
notice may be sent with a greater margin for error (e.g., more time
until the policy lapse). With more odometer readings and the corresponding
fidelity, the notice may be sent with a smaller margin of error
(e.g., less time until the policy lapse).
 Referring to FIG. 12, a system 1200 illustrates one embodiment
of a system implementation for sending electronic reminders to a
customer via a cell phone. Various databases and record readings
from government sources 1202 (e.g., state records and national government
sources), private business records 1204, and the owners' reported
odometer readings 1206 are amalgamated into a central data repository
1208 using vehicle identification numbers (VINs) as the primary
keys. Additionally, each recorded odometer reading is associated
with a date. A database 1210 of policyholders, including their associated
vehicles, is linked to the database 1208 of odometer readings.
 A server software process 1212 (e.g., software instructions
representing a process for estimating mileage to predict policy
lapses) operating on a server 1214 analyzes all odometer readings
associated with a policyholder's vehicle. When the process 1212
identifies an approaching policy expiration, it spawns a remote
server process 1216 to communicate with a policyholder. In the present
example, the remote server process 1216 sends a message to the policyholder's
cell phone 1220 over a standard cellular network 1218.
 The policyholder's cell phone 1220 receives the message,
which is interpreted by a local software process 1222 (that may
have been previously installed by the policyholder). The cell phone
then presents a screen querying the policyholder and requesting
that the policyholder enter his vehicle's current odometer reading
using the phone keypad. When the policyholder enters the odometer
reading, the local software process 1222 either recommends an immediate
insurance renewal or recommends waiting.
 If the local software process 1222 recommends a renewal,
the local software process opens a screen to purchase additional
miles of insurance coverage. The policyholder selects the quantity
and the method of purchase (e.g., via a credit card on file, or
via cell phone bill). If the local software process 1222 recommends
waiting, the local software process sends the odometer reading to
the remote software process 1216, which then passes the information
on in order to update the databases. In some embodiments, the local
software process 1222 may not query the policyholder if the recommendation
is to wait. Furthermore, in some embodiments, the local software
process 1222 may simply repeat a recommendation made by the remote
software process 1216.
 It is understood that the system 1220 may be coupled to
or part of other systems, such as the system 200 of FIG. 2. For
example, the server 1214 may be the server 220 of FIG. 2, or may
be in communication with the server 220.
 Referring now to FIG. 13, in another embodiment, a method
1300 may enable a policyholder to renew an expired policy by retroactively
pricing the coverage exposure from the point of policy lapse to
the point of a vehicle claim. Generally, there are three parties
concerned with possible coverage lapses: state regulators, policyholders,
and lienholders. Regulators need policyholders to maintain coverage
to meet legal requirements. Lienholders need coverage to maintain
protection of their collateral (the vehicle). Policyholders need
to maintain coverage to comply with the law, possible lienholders,
and to minimize potential financial losses.
 One problem of distance-based insurance is that policyholders
can drive beyond the odometer limit of their vehicle's coverage,
causing their policy to expire. The method 1300 may be used to address
the likely usage patterns of policyholders (as lapses will happen)
and balance the uninterrupted coverage needs of regulators, lienholders,
and policyholders without burdening the insurance product itself
with financial or operational baggage.
 In step 1302, an insurance claim is received from a policyholder.
In step 1304, a determination is made as to whether the policy against
which the claim is being made has lapsed. For example, an odometer
reading included in the claim may be compared to an expiration odometer
value of the policy. If the policy has not lapsed, the method continues
to step 1312, where the claim is processed.
 If the policy has lapsed, the method continues to step 1306,
where a premium is calculated. While the policyholder is explicitly
covered for any claims/involvements that occur beyond the stated
odometer limit of their policy, the policyholder will be charged
a financial premium if the associated insurance policy is beyond
the stated odometer limit. Among other benefits, this premium encourages
the policyholder to keep their policy current by aligning their
financial interests with their risk interests.
 The premium may be calculated as: Premium=((Current odometer
reading)-(Odometer limit for policy expiration))*((Policy rate)*(Multiplier)).
"Premium" is the price the policyholder will be charged
for the period of vehicle use between the expiration of their policy
and the odometer reading at the time of the involvement/claim. "Current
odometer reading" is the current reading of the vehicle's odometer.
"Odometer limit for policy expiration" is the upper limit
for the policy coverage (e.g., if the policyholder purchased 5,000
miles of coverage with a starting odometer reading of 90,000 miles,
then the policy expires at 95,000 miles). "Policy rate"
is the regular cost of coverage to the policyholder for the given
vehicle and coverage selections (e.g., $0.05/mile). "Multiplier"
is a number that indicates how much the premium will be over the
 Accordingly, if a claim is made on a lapsed policy, the
premium will be charged for the usage during the lapse. For instance,
if a policyholder's policy ends at 95,000 miles and the policyholder
has an involvement at 100,000 miles, the policyholder may still
elect to make a claim. If a claim is made, he must pay for the implicit
insurance consumed from 95,000 miles to 100,000 miles, a total of
5,000 miles. These 5,000 miles of coverage will cost him a multiple
of his usual rate. For instance, if his usual rate is $0.05/mile,
he must pay $0.25/mile (with a multiplier of five). Therefore, he
must pay $1,250 (instead of the $250 cost at the usual rate).
 In step 1308, a determination is made as to whether the
policyholder wants to renew the policy. The premium may be displayed
to the policyholder at this time or, in other embodiments, the policyholder
may simply be given the choice of renewal and notified that a premium
will be charged per a defined policy that is provided to the policyholder.
If the policyholder does not want to renew the policy, the method
1300 ends. If the policyholder does want to renew the policy, payment
from the policyholder may be accepted in step 1310 and the claim
may be processed in step 1312. Accordingly, the method 1300 may
provide "retroactive coverage" for distance-based insurance
to be maintained at all times. Furthennore, the premium may encourage
policyholders to keep their policies current through renewal, extension,
or larger initial purchases.
 In another embodiment, no grace period or retroactive coverage
will be provided. In such an embodiment, if a customer has exceeded
the mileage or time limit of his or her policy, he or she will be
denied coverage for any claims submitted for events occurring after
the lapse. As will be more fully described below, in some cases,
policies will expire at the earlier of a predetermined time or exceeding
the mileage limit of the policy.
 Regardless of whether a particular policy has a time-based
expiration, credit for unused mileage may be available for renewing
a policy before expiration. In one embodiment, the number of miles
of coverage available on a policy will be added to the renewal policy.
The price of the new policy is not reduced in this embodiment, although
other methods are possible. A customer may effectively lower his
or her cost on the new policy by simply buying fewer miles at renewal.
Over time, the customer, as well as the present system will be able
to more accurately predict the actual number of miles needed over
a given period of time. It may also be possible to differentiate
between the number of miles needed during a given time of year.
For example, a particular driver may use more miles during the summer
or winter months. This information can be taken into account for
purposes of renewing policies, adding miles, or generating reminder
 In addition to cases where a customer may wish to renew
or add miles before the end of a term (or before all purchased miles
are utilized), unused mileage may also be rolled over to a new policy
in the event of a total loss of the covered vehicle. Similarly,
miles may be creditable on a new policy if the covered vehicle is
sold or traded. In some embodiments, refunds for unused miles will
not be issued unless the policy is canceled by the insurer. In other
embodiments, other arrangements are possible, including refunding
at full price or a reduced price per mile.
 Referring now to FIGS. 14 and 15, in other embodiments,
it is understood that variations of a distance-based insurance policy
may be used. For example, three possible distance-based policy contract
types include a pure distance-based policy, a hybrid policy, and
an adjusted term policy. The pure distance-based policy (a portion
of which is shown in FIG. 14) bases the policy beginning and ending
solely on odometer readings. The policy is only valid while the
vehicle's odometer reading is within the stated value range. The
hybrid policy type combines term-based comprehensive coverage with
distance-based liability/collision coverage. The comprehensive portion
is delimited by two dates to create a term policy. The liability/collision
portion is delimited by two odometer readings to create a distance
policy. The adjusted term policy type (a portion of which is shown
in FIG. 15) provides for a term with annual credits/debits for actual
usage (e.g., based on mileage). The credit/debit is based upon the
harvested odometer readings. If the customer is under the stated
mileage at the end of the term, he will receive a credit for the
unused miles at the policy rate. If the customer is over the mileage,
he will pay a debit for the overage at the policy rate.
 It is understood that, while the above embodiments do not
rely on odometer audits or verification, various steps may be implemented
to protect against fraud using, for example, candidate screening
at the time of purchase, odometer record audits at the time of a
claim, and/or national claim screening at the time of a claim. Some
or all of these approaches may be implemented in the examples described
above, including the system 200.
 Using candidate screening at the time of purchase (e.g.,
driver's license number, license plate number, and credit card),
an insurance company may gather many pieces of corroborating information
regarding an applicant for a policy. By cross-checking information
with vehicle registration and ownership records, criminal records,
registered addresses, claims databases, etc., discrepancies or other
"flags" may be identified that may prevent a policy from
issuing to a customer. In some embodiments, such a flag may result
in a request for the potential customer to contact the insurance
company, or may result in a notification to the insurance company
that customer support should contact the potential customer.
 Using odometer record audits at the time of a claim may
include checks with public and private databases (vehicle registration,
emission inspections, oil services, owner statements, etc.). For
example, if the involved vehicle has been in an accident, the reporting
police officer will provide an odometer reading; if the involved
vehicle is sent to a repair shop, the latter will provide an odometer
reading. A suspect odometer history may result in a claim being
denied or investigated.
 National claim screening at the time of a claim may be used
in place of or in addition to candidate/claim screening at the point-of-sale.
For example, an insurance company may screen all claim requests
against fraud discovery and prevention database services from companies
providing such information.
 Referring now the FIG. 16, a flowchart of one embodiment
of another method for assessing, pricing, and provisioning distance
based vehicle insurance is shown. Additional references are made
to FIGS. 17 through 22, which are exemplary screen shots illustrating
various displays that could be implemented by the system of FIG.
2 or by other systems according to the present disclosure. At step
1610, customer information may be provided by the customer. Referring
also now to FIG. 17, it can be seen that the customer information
may include a number of items such as first name, last name, date
of birth, gender, state, and zip code. In addition to driver information,
vehicle information may also be collected in step 1610. Vehicle
information may include the vehicle identification number and the
current odometer reading of the vehicle. In the present embodiment,
the vehicle identification number is used instead of the license
plate number. The aforementioned customer information can be used
in this embodiment instead of the driver's license number and associated
database as was previously described.
 It can also be seen from FIG. 17 that the customer may have
the option of adding additional drivers for the current automobile.
As can be seen in FIG. 16 at step 1612, the system makes the determination
as to whether additional drivers will be covered based on the input
selected by the customer. If additional drivers are to be entered,
the process proceeds to step 1613 where the additional driver information
will be entered. It is understood that if additional driver information
is to be provided in the present embodiment, the additional information
would necessarily correspond to the already-entered vehicle identification
number and odometer mileage. The process returns to step 1612 to
determine if additional drivers are to be covered. If so, step 1613
 Following the entry of all of the additional driver information,
or if there is only a single driver as determined at step 1612,
at step 1614 the customer will select a coverage amount. With reference
now also to FIG. 18, it can be seen that a number of basic coverage
options may be provided to the customer. As has been previously
described, the price offered will correspond to the limits of liability
chosen and to the car and driver (or drivers) to be covered based
on known actuarial methods. In addition to basic coverages as shown
in FIG. 18, other coverages may also be selectable by the customer.
These additional coverages may include, but are not limited to,
physical damage, towing and vehicle rental, uninsured motorist,
and personal injury protection. As can be seen in FIG. 18, the basic
coverage options as well as each of the additional coverage options
are priced per unit distance. In addition, the policy fee for administration
of the insurance policy is computed on a per unit distance basis.
In the present embodiment, this policy fee rate is shown along with
the other insurance options and will be included in the total price.
 At step 1616, the customer will choose the number of miles
of insurance he or she wishes to purchase at the present time. Referring
now also to FIG. 19, it can be seen that a total price per mile
(unit distance) may be displayed which corresponds to the sum of
all of the previously selected options plus the policy fee. In the
present embodiment, the customer will be limited to purchasing miles
of coverage in lots of 1,000, ranging from 1,000 up to 6,000. In
other embodiments, the customer may be able to purchase more or
fewer miles and may also be able to select his or her own denominations
of miles needed.
 It can also be seen from FIG. 19 that in the present embodiment
the policy provides an expiration date. In one embodiment, the expiration
date will be sic months from the date of purchase, but in other
embodiments other expiration time limits are possible. As described,
not every embodiment will provide policies with an expiration date.
Although not shown in FIG. 19, some embodiments may feature additional
information on the screen, such as previous mileage-per-month data.
A predictive feature indicating whether the mileage being purchased
by the customer may is projected to be adequate for the duration
of the current policy may also be provided.
 At step 1618, a confirmation page or pages may be provided
to the customer as can be seen in FIG. 20. FIG. 20 represents one
possible confirmation page, although it is understood that other
formats or displays are possible. Information appearing on the confirmation
page may include, but is not limited to, the drivers and vehicle
covered, the current coverages and limits selected by the customer,
the premium rate expressed as a cost per mile, the total number
of miles selected by the customer for purchase, and the total policy
cost. As can be seen, the policy period may also be defined or confirmed
on the confirmation page. In some embodiments, the customer may
be required to electronically initial certain rejections of coverages.
In the example of FIG. 20, the customer has been required to initial
a rejection of personal injury protection coverage. Also as can
be seen in FIG. 20, it may be necessary for the customer to indicate
whether or not a lien holder is associated with the vehicle. If
so, an additional form (not shown) may be required for the customer
to enter the lien holder information.
 Following the confirmations at step 1618, representations
and warranties may be provided at step 1620, as shown in FIG. 21.
At this point, a number of assertions, representations, warranties
and/or other statements may be required of the customer. As can
be seen in FIG. 21, these questions and statements may involve licensing
in a particular state, criminal charges, moving violations, purposes
of the insured vehicle, and other data. The customer may be encouraged
to carefully read all of the information presented, as shown in
FIG. 21, and then be asked to electronically initial the from, thereby
representing and warranting all of the stated facts.
 Following the representations and warranties at step 1620,
at step 1622 billing data may be provided by the customer. Referring
also now to FIG. 22, one form for entering billing information is
shown. As can be seen, a credit card number may be provided, along
with a billing address for the credit card. In other embodiments,
other payment methods such as a checking account transfer may be
utilized. In the present embodiment, at this step, the customer
is also required to enter a physical garaging address for the vehicle
to satisfy existing insurance requirements. Although the policy
may be rated solely on information obtained previously, (e.g., zip
code) customers may still be required to enter an actual physical
street address. Following entry of the billing data at step 1622,
at step 1624 the customer may have the option of printing liability
cards, as may be required by state law. In other embodiments, the
customer may be able to request that liability cards be physically
mailed to his or her address.
 While the preceding description shows and describes one
or more embodiments, it will be understood by those skilled in the
art that various changes in form and detail may be made therein
without departing from the spirit and scope of the present disclosure.
For example, various steps of the described methods may be executed
in a different order or executed sequentially, combined, further
divided, replaced with alternate steps, or removed entirely. In
addition, various functions illustrated in the methods or described
elsewhere in the disclosure may be combined to provide additional
and/or alternate functions. As described, some or all of the steps
of each method may be implemented in the form of computer executable
software instructions. Furthermore, the instructions may be located
on a server that is accessible to many different clients, may be
located on a single computer that is available to a user, or may
be located at different locations. Therefore, the claims should
be interpreted in a broad manner, consistent with the present disclosure.
While various embodiments have been described for purposes of this
disclosure, numerous changes and modifications will be apparent
to those of ordinary skill in the art. Such changes and modifications
are encompassed within the spirit of this invention as defined by