Patent ID: 8812330

Claim:
A method of determining a distance-based premium for vehicle insurance for a customer, comprising: receiving from a remote terminal information concerning one of actual distance traveled and estimated distance traveled; calculating, in a processor, a customer premium based at least in part upon: the one of actual distance traveled and estimated distance traveled, a variable rate per distance unit factor, the rate per distance unit factor decreasing over a first range as the one of actual distance traveled and estimated distance traveled increases, and a calculated rate per distance unit equation, the rate per distance unit equation calculated for a rate per distance unit curve, and determined by: processing a received plurality of distance data and loss data; correlating the distance data with the loss data, the correlation exhibiting a curve with non-linear distance-based relationship; and applying a curve fitting technique to the correlated distance data and loss data to find an equation that closely matches the exhibited curve; and transmitting, by the processor, the calculated customer premium.