Exhibit 1022
`
`(12) United States Patent
`Henderson et al.
`
`(10) Patent No.:
`(45) Date of Patent:
`
`US 6,868,386 B1
`*Mar. 15, 2005
`
`US006868386B1
`
`(54)
`
`(75)
`
`MONITORING SYSTEM FOR
`DETERMINING AND COMMUNICATING A
`COST OF INSURANCE
`
`Inventors: Maria Henderson, Tampa, FL (US);
`Robert J. McMillan, Colorado Springs,
`CO (US); Alexander D. Craig,
`Moreland Hills, OH (US); John P.
`Heinen, Tampa, FL (US); Byron J.
`Olexa, Mentor-on-the-Lake, OH (US);
`Mark C. McElroy, South Euclid, OH
`(US); Robert S. Lee, Hudson, OH (US)
`
`(73)
`
`Assignee: Progressive Casualty Insurance
`Company, Mayfield Village, OH (US)
`
`Notice:
`
`Subject to any disclaimer, the term of this
`patent is extended or adjusted under 35
`U.S.C. 154(b) by 0 days.
`
`This patent is subject to a terminal dis-
`claimer.
`
`(21)
`
`(22)
`
`(63)
`
`(51)
`(52)
`(58)
`
`(56)
`
`Appl. No.: 09/571,650
`
`Filed:
`
`May 15, 2000
`
`Related U.S. Application Data
`
`Continuation-in-part of application No. 09/135,034, filed on
`Aug. 17, 1998, now Pat. No. 6,064,970, which is a continu-
`ation of application No. 08/592,958, filed on Jan. 29, 1996,
`now Pat. No. 5,797,134.
`
`Int. Cl.7 .............................................. .. G06F 17/60
`U.S. Cl.
`...... ..
`705/4; 340/439; 705/400
`
`Field of Search .......................... .. 340/439, 870.01;
`360/5; 705/4, 400
`
`References Cited
`
`U.S. PATENT DOCUMENTS
`
`3,504,337 A
`4,067,061 A
`
`3/1970 Ekman ..................... .. 340/439
`1/1978 Juhasz ......................... .. 360/5
`
`FOREIGN PATENT DOCUMENTS
`
`EP
`EP
`FR
`GB
`GB
`JP
`JP
`JP
`JP
`W0
`W0
`W0
`
`0 700 009 A2
`935208 A2
`2 533 049
`2 143 978 A
`2 225 461 A
`4—182868
`6—4733
`6—259632
`7—159192
`9/002388
`WO 97/27561 A1 *
`W0 200052616 A2
`
`3/1996
`11/1999
`3/1984
`2/1985
`5/1990
`6/1992
`1/1994
`9/1994
`6/1995
`8/1989
`7/1997
`9/2000
`
`OTHER PUBLICATIONS
`
`Pasher, Auto Web site takes off, Mar. 1998, National Under-
`water (Property & Casualty/Risk & Benefits Management),
`vol. 102 No. 11, pp. 9 and 16.
`Festa, For Insurance Sales, Turn to the ‘Web’, Aug. 1995,
`Insurance Regulator, vol. 5, No. 31, p. 1.
`Business Editors, Electric Insurance Joins Intuit’s Quicken
`InsureMarket O “ering Online Auto Policies in 6 States, Dec.
`1998, Business Wire.
`
`(List continued on next page.)
`
`Primary Extzminer—Edward Cosimano
`(74) Attorney, Agent,
`or Firm—Fay, Sharpe, Fagan,
`Minnich & McKee, LLP
`
`(57)
`
`ABSTRACT
`
`A method and system for communicating insurance related
`services between an insured and an insurer through an
`Internet communication scheme includes a processing sys-
`tem for processing acquired event and sensored data to
`compute the cost of insurance for the same period as the data
`is acquired. An enhanced Internet communication scheme
`provides an insured access to the acquired data and its
`processing through enhanced presentation systems (e.g.,
`maps with usage, service or special event processing or even
`automobile service diagnostics.) In addition, communication
`packages can provide estimates based upon user-supplied
`information identifying projected usages.
`
`(List continued on next page.)
`
`17 Claims, 6 Drawing Sheets
`
`9 DATA
`UNIT or RISK
`DATA
`PROCE
`STORAGE Loelc
`SENSOR DATAAND
`TRIGGER EvENrs
`
`,—2D4
`
`E
`EvENT DATA
`STORED SENSOR DATA
`
`DATA PROCESS LOG“; ‘
`
`5 .
`
`503 @
`‘°°”'RE EVENT I
`
`Em
`
`son
`
`502
`
`5°‘
`
`515
`
`AcauIRE DATA
`UPDATE UNITOF
`512:1
`\
`RISK
`WEB SERVER
`smns ALL EVENTS
`I
`AND DATA
`DATA ANDIOR EVENT
`PROCESSING
`
`
`
`
`200
`
`.2.
`
`
`
`
`
`
`EVENT OR
`DAYA
`EVENT
`
`524
`526
`
`SPECIFIC EVENT
`PROCESSING
`ANDIDRALERTS
`(8.0. CHARGE
`FER USE EVENTS.
`IMMEDIATE
`RESPONSE CLAIMS.
`EMS. POLICE)
`
`Liberty Mutual
`
`Exhibit 1022
`
`Page 000001
`
`PRODUCE
`ONLINE ACCOUNT
`DNLINE SERVICES
`ONLINE SERVICES
`
`PERIODIC El
`STATEMENTS
`INTERFACE
`INTERFACE
`
`
`
`
`534
`(INCLUDING BUT NOT
`(INCLUDING BUT NOT
`(INCLUDING BUT Nor
`LIMITED TD: MAPS
`LIMITED To. WHAT IF
`LIMITED TO: REAL-TIME
`
`ACCOUNT
`wm-I usxee, SERVICE
`SERVICES, MAPS
`GAMING. USAGE
`STATEMENTS
`PROJECTIONS]
`wITI-1 CURRENT
`USAGE DETAIL)
`
`LOCATION.
`GEOFENCING.
`AUTOMOBILE SERVICE
`
`DIAGNOSTIC)
`
`
`
`
`
`
`

`
`US 6,868,386 B1
`Page 2
`
`U.S. PATENT DOCUMENTS
`
`............... .. 340/439
`8/1996 Nicol et al.
`5,548,273 A
`8/1996 Alesiu ................... .. 342/457
`5,550,551 A
`6/1997 Coiner et al.
`.
`364/424.04
`5,638,273 A
`12/1997 Westerlage et al.
`....... .. 705/417
`5,694,322 A
`8/1998 McMillan et al.
`........ .. 705/400
`5,797,134 A
`12/1998 Pescitelli et al_
`N 705/4
`5,345,256 A
`9/1999 Powers ........................ .. 705/4
`5,956,691 A
`OTHER PUBLICATIONS
`
`
`
`“The Safest Cars of 91”, Baig, Edward U.S. News & World
`Report V109, n22, p. 71;Dec. 3, 1990.
`“Vend0r’s Spice Up Services”, Robert Deierlein, Beverage-
`W°r1d’V109’ “1467’P‘ 825 Jun‘ 1990'
`R°§9“b91g= M3111“; A1°Xa“d91> Shephen A; 1 R410 C1a551fi'
`cation Reform 11'] New Jersey. Best’s Review (Prop/Casu-
`a1ty)V0- 92. N0. 12, pp. 30-32. Apr. 1992.
`Kaneko, Tetsuya; Jovanis, Paul P. Multiday driving patterns
`and motor carrier accident risk. A disaggregate analysis.
`Accident Analysis and Prevention, Vol. 24 No. 5 pp.
`437_456 Jan 1 1992
`’
`’
`’
`'
`’
`“
`'
`,
`Jan. 1, 1994 UK: An Interest In Black Mag1c—Motor
`T<°«Ch11010gY”,1I1SW6mC€Ag€,P-25-
`“The Road Watches You”, The New York Times, May 3,
`1995, Wednesday, Late Editi0n—Final, p. 23.
`
`* cited by examiner
`
`Page 000002
`
`
`
`42342926 A
`42581421 A
`4533902 A
`4,608,638 A
`4=038»295 A
`4,667,336 A
`4,745,564 A
`4,763,745 A
`4,807,179 A
`4,829,434 A
`:=:‘3é>:26 A
`4,843,538 2
`4:853:720 A
`4,939,652 A
`4,987,541 A
`4,992,943 A
`543552851 A
`511111289 A
`5,189,621 A
`5,223,844 A
`5,319,374 A
`5,359,528 A
`5,365,451 A
`5,430,432 A
`5,499,182 A
`5,500,806 A
`
`'
`
`-
`
`.
`
`-- 702/188
`11/1930 W311“ 61 91-
`- 701/35
`3/1981 Juhasz 6191-
`350/5
`8/1935 D°C1<C”1 31 ~~
`8/1986 Tsikos ...................... .. 364/424
`1/1937 M1d‘11ebr001<e1'=11
`340/465
`5/1987 Best
`............. ..
`. 377/15
`5/1988 Tennes et al.
`.. 702/141
`8/1988 Eto et al.
`..
`.. 180/143
`2/1989 Clere et al.
`.. 360/5 X
`5/1989 Karmel et al.
`74/866 X
`5/1989 L11_°11S 91 91'
`“ 364/401
`8/19:9 9/[R/zlafllzzettl
`383/5(1)?
`8/1989 Onari e.t.61.l......:........:....:N364/431.07
`7/1990 Steiner ...... N
`. 364/424.04
`1/1991 Levente et al.
`. 364/424.04
`2/1991 MCCraCken ..
`. 364/424.04
`10/1991 5110301 ------ --
`342/457
`5/1992 Lucas 9131'
`~- 358/108
`.
`2/1993 Onarietal.
`. 364/431.04
`6/1993 Mansell et al.
`.. 342/357
`6/1994 Desai et 31’
`5
`0 343/387
`10/1994 Haendeletal.
`364/424.04
`11/1994 Wang et al.
`.. 364/449
`7/1995 Camhi 61 al.
`340/438
`3/1996 Ousborne
`701/35
`3/1996 Bellin et al.
`......... .. 364/528.33
`
`

`
`U.S. Patent
`
`Mar. 15,2005
`
`Sheet 1 of 6
`
`US 6,868,386 B1
`
`102
`
`
`
`
`TRIGGER
`EVENT
`
`104
`
`TRIGGER
`EVENT
`
`PROCESSING
`CONTACT
`CONTACT
`CLAIMS
`CENTRAL
`DISPATCH
`CONTROL
`?
`
`
`
`
`?
`
`CONTACT
`CLAIMS
`DISPATCH
`
`
`CONTACT
`CENTRAL
`CONTROL
`
`
`
`
`
`
`
`
`
`
`CENTRAL
`CONTROL
`TAKES
`APPROPRIATE
`ACTION
`
`
`
`RECORD
`CENTRAL
`CONTROL
`ACTION
`INFORMATION
`
`
`
`RECORD
`CLAIMS
`DISPATCH
`ACTION
`INFORMATION
`
`
`
`TRIGGER
`EVENT
` RECORD
`DATA
`DATA
`
`
`
`130
`
`Page 000003
`
`
`CLAIMS
`DISPATCH
`
`TAKES
`
`
`APPROPRIATE
`ACTION
`
`
`
`
`
`
`

`
`U.S. Patent
`
`Mar. 15,2005
`
`Sheet 2 of 6
`
`US 6,868,386 B1
`
`
`
`oz_mmm_oomn_<._.<O
`
`zo_E._mz<EQZ<
`
`mzo:<o_z:s_s_oo
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`Page 000004
`
`
`
`<._.<Qmmaomm
`
`
`
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`
`
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`
`
`
`
`
`

`
`U.S. Patent
`
`Mar. 15,2005
`
`Sheet 3 of 6
`
`US 6,868,386 B1
`
`FIG.3
`
`Page 000005
`
`

`
`U.S. Patent
`
`Mar. 15,2005
`
`Sheet 4 of 6
`
`US 6,868,386 B1
`
`416
`
`OPERATIONS
`CONTROL
`
`CENTER
`
`418
`
`
`
` COMMUNICATIONS LINK (INCLUDING,
`
`BUT NOT LIMITED TO CELLULAR OR
`
`SATELLITE TRANSMISSION, MAGNETIC
`OR OPTICAL MEDIA, RADIO FREQUENCY
`OR OTHER TECHNOLOGY)
`
`
`
`
`
`
`41°
`
`DRIVER INPUT
`CONSOLE
`
`ADDITIONAL
`SENSORS
`
`414
`
`422
`
`POSITIONING
`I3uITEI~IV<IJ(TELIIIIIIITcI'ELDI193'SIDS,
`
`RADIO FREQUENCY
`
`TAGS, OR OTHER
`TECHNOLOGY)
`
`Page 000006
`
`
`
`300
`
`ON-BOARD DATA LOGGING
`AND/OR COMMUNICATION
`DEVICE
`
`VEHICLE
`DATABUS
`AND ,oR
`SENSORS
`412
`
`NAVIGATION
`SUBSYSTEM
`
`420
`
`FIG. 4
`
`

`
`U.S. Patent
`
`Mar. 15,2005
`
`Sheet 5 of 6
`
`US 6,868,386 B1
`
`
`
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`
`
`
`Page 000007
`
`
`
`
`
`
`

`
`U.S. Patent
`
`Mar. 15,2005
`
`Sheet 6 of 6
`
`US 6,868,386 B1
`
`INFORMATION
`
`EXTERNAL
`DATABASE WITH
`CUSTOMER
`
`COLLECT UNDERWRITING
`AND RATING INFORMATION
`FROM CUSTOMER AND
`
`EXTERNAL SOURCES,
`FOR EXAMPLE: AGE,
`SEX, DRIVING RECORD,
`TYPE OF TELEMATIC
`
`UNIT, ETC.
`
`CUSTOMERS
`
`206
`
`BASED ON THE
`
`COLLECTED INFORMATION,
`DEVELOP AND RECORD
`THE RATING ALGORITHM
`
`200
`
`UNIT OF RISK
`DOWN LOAD RATING
`
`
`524
`
`
`ALGORITHM TO
`
`
`
`
`ON-BOARD DATA
`LOGGING AND /OR
`COMMUNICATION
`DEVICE
`
`TO DATA
`LOGGING AND
`COMMUNICATION
`
`FIG. 6
`
`Page 000008
`
`

`
`US 6,868,386 B1
`
`1
`MONITORING SYSTEM FOR
`DETERMINING AND COMMUNICATING A
`COST OF INSURANCE
`
`This application is a continuation-in-part application of
`U.S. Ser. No. 09/135,034, filed Aug. 17, 1998, now U.S. Pat.
`No. 6,064,970 which is a continuation of U.S. Ser. No.
`08/592,958, filed Jan. 29, 1996, now U.S. Pat. No. 5,797,
`134. A related application is U.S. Ser. No. 09/364,803 filed
`Jul. 30, 1999.
`
`FIELD OF THE INVENTION
`
`The present invention relates to data acquisition, process-
`ing and communicating systems, and particularly to a sys-
`tem for acquiring and handling relevant data for an insured
`unit of risk for purposes of providing a more accurate
`determination of cost of insurance for the unit of risk and for
`communicating or quoting the so determined cost to an
`owner of the unit of risk. Although the invention has its
`principal applicability to motor vehicles such as
`automobiles,
`the invention is equally applicable to other
`units of risk such as, without limitation, motorcycles, motor
`homes, trucks, tractors, vans, buses, boats and other water
`craft and aircraft. The invention especially relates to a
`system for monitoring and communicating units of risk
`operational characteristics and operator actions for imple-
`menting the operational characteristics, to obtain increased
`amounts of data relating to the safety or risk of use for a
`subject unit, for purposes of providing a more accurate
`determination of the cost of insurance corresponding to a
`real time usage of the risk unit, and for making such data and
`computed costs accessible to a customer or insured or others
`on hardcopy, over the Internet or by other electronic means
`for convenient communication. The invention relates to
`electronic commerce, particularly where insurance and
`related information is marketed, sold or communicated Via
`the Internet or other interactive network.
`
`BACKGROUND OF THE INVENTION
`
`Conventional methods for determining costs of motor
`vehicle insurance involve gathering relevant historical data
`from a personal interview with the applicant for the insur-
`ance and by referencing the applicant’s public motor vehicle
`driving record that is maintained by a governmental agency,
`such as a Bureau of Motor Vehicles. Such data results in a
`classification of the applicant to a broad actuarial class for
`which insurance rates are assigned based upon the empirical
`experience of the insurer. Many factors are relevant to such
`classification in a particular actuarial class, such as age, sex,
`marital status, location of residence and driving record.
`The current system of insurance creates groupings of
`vehicles and drivers (actuarial classes) based on the follow-
`ing types of classifications.
`
`Vehicle:
`
`Age;
`manufacturer, model; and
`value.
`Driver:
`
`Age;
`sex;
`marital status;
`driving record (based on government reports),
`
`10
`
`15
`
`20
`
`25
`
`30
`
`35
`
`40
`
`45
`
`50
`
`55
`
`60
`
`65
`
`2
`
`-continued
`
`violations (citations);
`at fault accidents; and
`place of residence.
`Coverage:
`
`Types of losses covered,
`liability,
`uninsured motorist,
`comprehensive, and
`collision;
`liability limits; and
`deductibles.
`
`The classifications, such as age, are further broken into
`actuarial classes, such as 21 to 24,
`to develop a unique
`vehicle insurance cost based on the specific combination of
`actuarial classes for a particular risk. For example,
`the
`following information would produce a unique vehicle
`insurance cost.
`
`Vehicle:
`
`Age
`manufacturer, model
`value
`Driver:
`
`Agesex
`marital status
`drivi.r1g record
`(based on government reports)
`violations
`at fault accidents
`place of residence
`Coverage:
`Types of losses covered
`
`liability
`uninsured motorist
`comprehensive
`collision
`liability limits
`deductibles
`
`1997 (three years old)
`Ford, Explorer XLT
`$18,000.
`
`38 years old
`male
`si.r1gle
`
`1 poi.r1t (speeding)
`3 points (one at fault accident)
`33619 (Zip code)
`
`yes110
`yCS
`yes
`$100,000 ./$300,000./$50,000.
`$500./$500.
`
`A change to any of this information would result in a
`different premium being charged, if the change resulted in a
`different actuarial class for that variable. For instance, a
`change in the drivers’ age from 38 to 39 may not result in
`a different actuarial class, because 38 and 39 year old people
`may be in the same actuarial class. However, a change in
`driver age from 38 to 45 may result in a different premium
`because of the change in actuarial class.
`Current insurance rating systems also provide discounts
`and surcharges for some types of use of the vehicle, equip-
`ment on the vehicle and type of driver. Common surcharges
`and discounts include:
`
`Surcharges:
`Business use.
`Discounts:
`
`Safety equipment on the vehicle
`airbags, and
`antilock brakes;
`theft control devices
`
`Page 000009
`
`

`
`US 6,868,386 B1
`
`3
`
`-continued
`
`passive systems (e.g. “The Club”), and
`alarm system; and
`driver type
`good student, and
`safe driver (accident free).
`group _
`_
`senior drivers
`fleet drivers
`
`A principal problem with such conventional insurance
`determination systems is that much of the data gathered
`from the applicant in the interview is not verifiable, and even
`existing public records contain only minimal information,
`much of which has little relevance towards an assessment of
`the likelihood of a claim subsequently occurring. In other
`words, current rating systems are primarily based on past
`realized losses. None of the data obtained through conven-
`tional systems necessarily reliably predicts the manner or
`safety of future operation of the vehicle. Accordingly, the
`limited amount of accumulated relevant data and its minimal
`evidential value towards computation of a fair cost of
`insurance has generated a long-felt need for an improved
`system for more reliably and accurately accumulating data
`having a highly relevant evidential value towards predicting
`the actual manner of a vehicle’s future operation.
`Many types of vehicle operating data recording systems
`have heretofore been suggested for purposes of maintaining
`an accurate record of certain elements of vehicle operation.
`Some are suggested for identifying the cause for an accident,
`others are for more accurately assessing the efficiency of
`operation. Such systems disclose a variety of conventional
`techniques for recording vehicle operation data elements in
`a variety of data recording systems. In addition, it has also
`been suggested to provide a radio communication link for
`such information via systems such as a cellular telephone to
`provide immediate communication of certain types of data
`elements or to allow a more immediate response in cases
`such as theft, accident, break-down or emergency. It has
`even been suggested to detect and record seatbelt usage to
`assist in determination of the vehicle insurance costs (US.
`Pat. No. 4,667,336).
`The various forms and types of vehicle operating data
`acquisition and recordal systems that have heretofore been
`suggested and employed have met with varying degrees of
`success for their express limited purposes. All possess
`substantial defects such that they have only limited eco-
`nomical and practical value for a system intended to provide
`an enhanced acquisition, recordal and communication sys-
`tem of data which would be both comprehensive and reliable
`in predicting an accurate and adequate cost of insurance for
`the vehicle. Since the type of operating information acquired
`and recorded in prior art systems was generally never
`intended to be used for determining the cost of vehicle
`insurance,
`the data elements that were monitored and
`recorded therein were not directly related to predetermined
`safety standards or the determining of an actuarial class for
`the vehicle operator. For example, recording data character-
`istics relevant to the vehicle’s operating efliciency may be
`completely unrelated to the safety of operation of the
`vehicle. Further,
`there is the problem of recording and
`subsequently compiling the relevant data for an accurate
`determination of an actuarial profile and an appropriate
`insurance cost therefor.
`
`Current motor vehicle control and operating systems
`comprise electronic systems readily adaptable for modifica-
`
`4
`tion to obtain the desired types of information relevant to
`determination of the cost of insurance. Vehicle tracking
`systems have been suggested which use communication
`links with satellite navigation systems for providing infor-
`mation describing a vehicle’s location based upon naviga-
`tion signals. When such positioning information is com-
`bined with roadmaps in an expert system, vehicle location is
`ascertainable. Mere vehicle location, though, will not pro-
`vide data particularly relevant to safety of operation unless
`the data is combined with other relevant data in an expert
`system which is capable of assessing whether the roads
`being driven are high-risk or low-risk with regard to vehicle
`safety.
`On-line Web sites for marketing and selling goods have
`become common place. Many insurers offer communication
`services to customers via Web sites relevant to an insured
`profile and account status. Commonly assigned application
`U.S. Ser. No. 09/135,034, filed Aug. 17, 1998, now U.S. Pat.
`No. 6,064,970 discloses one such system. Customer comfort
`with such Web site communication has generated the need
`for systems which can provide even more useful information
`to customers relative to a customer’s contract with the
`insurer. Such enhanced communications can be particularly
`useful to an insured when the subject of the communications
`relates to real time cost determination, or when the subject
`relates to prospective reoccurring insurable events wherein
`the system can relate in the existing insured’s profile with
`some insurer provided estimates of a future event for decid-
`ing an estimated cost of insuring the event.
`The present invention contemplates a new and improved
`monitoring, recording and communicating system for an
`insured unit of risk, which primarily overcomes the problem
`of determining cost of vehicle insurance based upon data
`which does not take into consideration how a specific unit of
`risk is operated. The subject invention will base insurance
`charges with regard to current material data representative of
`actual operating characteristics to provide a classification
`rating of an operator or the unit in an actuarial class which
`has a vastly reduced rating error over conventional insurance
`cost systems. Additionally, the present invention allows for
`frequent (monthly) adjustment
`to the cost of coverage
`because of the changes in operating behavior patterns. This
`can result in insurance charges that are readily controllable
`by individual operators. The system is adaptable to current
`electronic operating systems, tracking systems and commu-
`nicating systems for the improved extraction of selected
`insurance related data. In addition, the system provides for
`enhanced and improved communication of the relevant
`acquired data, cost estimates of insuring events and cus-
`tomer insured profiles through an Internet/Web site.
`BRIEF SUMMARY OF THE INVENTION
`
`In accordance with the present invention, there is dis-
`closed a method of determining a cost of automobile insur-
`ance based upon monitoring, recording and communicating
`data representative of operator and vehicle driving
`characteristics, whereby the cost is adjustable by relating the
`driving characteristics to predetermined safety standards.
`The method is comprised of steps of monitoring a plurality
`of raw data elements representative of an operating state of
`a vehicle or an action of the operator. Selected ones of the
`plurality of raw data elements are recorded when they are
`determined to have an identified relationship to the safety
`standards. The recorded elements are consolidated for pro-
`cessing against an insured profile and for identifying a
`surcharge or discount
`to be applied to a base cost of
`automobile insurance. The total cost of insurance obtained
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`US 6,868,386 B1
`
`5
`from combining the base cost and surcharges or discounts is
`produced as a final cost to the operator.
`In accordance with another aspect of the present
`invention,
`the recording comprises identifying a trigger
`event associated with the raw data elements which has an
`identified relationship to the safety standards so that trigger
`information representative of the event is recorded.
`In accordance with a more limited aspect of the present
`invention,
`the method comprises a step of immediately
`communicating to a central control station via an uplink,
`information representative of the trigger event and recording
`response information generated by the control station.
`In accordance with yet another aspect of the present
`invention, the method comprises steps of generating calcu-
`lated data elements and derived data elements from the raw
`data elements, and accumulating the calculated and derived
`data elements in a recording device.
`In accordance with the present invention, there is pro-
`vided a method and system for Internet on-line
`communicating, between an insurer and an insured, of
`detected operating characteristics of a unit of risk, (e.g., a
`vehicle) for a selected period, and the cost of insuring the
`unit for the selected period, as decided by the insurer in
`consideration of the detected operating characteristics. A
`Web site system is provided for selectively communicating
`the operating characteristics and the cost between the insurer
`and the insured. Amonitoring system monitors the operating
`characteristics. A storage system stores the operating char-
`acteristics and is accessible to the Web site system. A
`processing system decides the cost of insuring the unit for a
`period based upon the operating characteristics monitored
`during that period. The processing system is also accessible
`to the Web site system.
`One benefit obtained by use of the present invention is a
`system that will provide precise and timely information
`about the current operation of an insured motor vehicle that
`will enable an accurate determination of operating
`characteristics, including such features as miles driven, time
`of use and speed of the vehicle. This information can be used
`to establish actual usage based insurance charges, eliminat-
`ing rating errors that are prevalent in traditional systems and
`will result in vehicle insurance charges that can be directly
`controlled by individual operators.
`It is another benefit of the subject invention that conven-
`tional motor vehicle electronics are easily supplemented by
`system components comprising a data recording process, a
`navigation system and a communications device to extract
`selected insurance relevant data from the motor vehicle.
`
`It is another object of the present invention to generate
`actuarial classes and operator profiles relative thereto based
`upon actual driving characteristics of the vehicle and driver,
`as represented by the monitored and recorded data elements
`for providing a more knowledgeable, enhanced insurance
`rating precision.
`It is another aspect of the present invention that an on-line
`Web site is provided for communicating data, services, and
`estimates to customers via an Internet Web Site, including
`estimated costs for expected operating usage for a particular
`unit of risk. Accordingly, the real time cost determination
`and communication through the Web site provides the type
`of enhanced communications between a customer and an
`insurer that can be particularly useful in limiting costs, and
`enhancing safety.
`It is another benefit of the invention that a user of a unit
`of risk may be authenticated as a proper user of the unit, and
`a more accurate rating for the authenticated user may be
`implemented for the computation of insurance costs.
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`The subject new insurance rating system retrospectively
`adjusts and prospectively sets premiums based on data
`derived from motor vehicle operational characteristics and
`driver behavior through the generation of new actuarial
`classes determined from such characteristics and behavior,
`which classes heretofore have been unknown in the insur-
`ance industry. The invention comprises an integrated system
`to extract via multiple sensors, screen, aggregate and apply
`for insurance rating purposes, data generated by the actual
`operation of the specific vehicle and the insured user/driver.
`BRIEF DESCRIPTION OF THE DRAWINGS
`
`The invention may take physical form in certain parts and
`steps and arrangements of parts and steps,
`the preferred
`embodiments of which will be described in detail in this
`specification and illustrated in the accompanying drawings
`which form a part hereof and wherein:
`FIG. 1 is a block diagram/flowchart generally describing
`data capture methods within a unit of risk for insurance in
`claims processing;
`FIG. 2 is a block diagram generally illustrated in the
`communication network design the unit of risk including a
`response center of the insurer and a data handling center;
`FIG. 3 is a suggestive perspective drawing of a vehicle
`including certain data elements monitoring, recording and
`communication devices;
`FIG. 4 is a block diagram of a vehicle onboard computer
`and recording system implementing the subject invention for
`selective communication with a central operations control
`center and a global positioning navigation system;
`FIG. 5 is a block diagram illustrating use of acquired data
`including communication through Internet access; and,
`FIG. 6 is a block diagram/flowchart illustrating an under-
`writing and rating method for determining a cost of insur-
`ance in conjunction with the system of FIG. 4.
`DETAILED DESCRIPTION OF THE
`PREFERRED EMBODIMENTS
`
`The following terms and acronyms are used throughout
`the detailed description:
`Internet. A collection of interconnected (public and/or
`private) networks that are linked together by a set of
`standard protocols (such as TCP/IP and HTTP) to form a
`global, distributed network. While this term is intended to
`refer to what is now commonly known as the Internet, it is
`also intended to encompass variations which may be made
`in the future, including changes and additions to existing
`standard protocols.
`World Wide Web (“Web”). Used herein to refer generally
`to both
`a distributed collection of interlined, user-
`viewable hypertext documents (commonly referred to as
`Web documents or Web pages) that are accessible via the
`Internet, and (ii) the client and server software components
`which provide user access to such documents using stan-
`dardized Internet protocols. Currently, the primary standard
`protocol for allowing applications to locate and acquire Web
`documents is HTTP, and the Web pages are encoded using
`HTML. However, the terms “Web” and “World Wide Web”
`are intended to encompass future markup languages and
`transport protocols which may be used in place of (or in
`addition to) HTML and HTTP.
`Web Site. A computer system that serves informational
`content over a network using the standard protocols of the
`World Wide Web. Typically, a Web site corresponds to a
`particular Internet domain name, such as “progressive.oom,”
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`US 6,868,386 B1
`
`7
`and includes the content associated with a particular orga-
`nization. As used herein, the term is generally intended to
`encompass both
`the hardware/software server compo-
`nents that serve the informational content over the network,
`and (ii)
`the “back end” hardware/software components
`including any non-standard or specialized components, that
`interact with the server components to perform services for
`Web site users.
`
`Referring now to the drawings, wherein the showings are
`for purposes of illustrating the preferred embodiments of the
`invention only and not for purposes of limiting same, the
`FIGURES show an apparatus and method for monitoring,
`recording and communicating insurance related data for
`determination of an accurate cost of insurance based upon
`evidence relevant to the actual operation and in particular
`the relative safety of that operation. Generally, a unit of risk,
`e.g., vehicle, user is charged for insurance based upon
`statistical averages related to the safety of operation based
`upon the insurer’s experience with other users who drive
`similar vehicles in a similar geographic area. The invention
`allows for the measure of the actual data while the motor
`vehicle is being driven. Such data measurement will allow
`the vehicle user to directly control his/her insurance costs by
`operating the vehicle in a manner which he/she will know
`will evidence superior safety of operation and a minimal risk
`of generation of an insurance claim. Examples of data which
`can be monitored and recorded include:
`
`C.
`
`low
`
`1. Actual miles driven;
`2. Types of roads driven on (high risk vs. low risk); and,
`3. Safe operation of the vehicle by the vehicle user
`through:
`A. speeds driven,
`B. safety equipment used, such as seat belt and turn
`signals,
`time of day driven (high congestion vs.
`congestion),
`D. rate of acceleration,
`E. rate of braking,
`F. observation of traflic signs.
`4. Driver identification
`With reference to FIG. 3, an exemplary motor vehicle is
`shown in which the necessary apparatus for implementing
`the subject invention is included. An on-board computer 300
`monitors and records Various sensors and operator actions to
`acquire the desired data for determining a fair cost of
`insurance. Although not shown therein, a plurality of oper-
`ating sensors are associated with the motor vehicle to
`monitor a wide variety of raw data elements. Such data
`elements are communicated to the computer through a
`connections cable which is operatively connected to the
`vehicle data bus 304 through an SAE-J 1978 connector, or
`OBD-II connector or other vehicle sensors 306. A driver
`input device 308 is also operatively connected to the com-
`puter 300 through connector 307 and cable 302. The com-
`puter is powered through the car battery 310, a conventional
`generator system, a battery or a solar based system (not
`shown). Tracking of the Vehicle for location identification
`can be implemented by the computer 300 through navigation
`signals obtained from a GPS (global positioning system)
`antenna, a differential GPS or other locating system 312. The
`communications link to a central control station is accom-
`plished through the cellular telephone, radio, satellite or
`other wireless communication system 314.
`FIG. 4 provides the block diagram of the in-vehicle
`computer system. The computer 300 is comprised of several
`principal components, an on-board data storage device, an
`
`8
`input/output subsystem for communicating to a variety of
`external devices, a central processing unit and memory
`device and a real time operating kernel for controlling the
`various processing steps of the computer 300. It is known
`that all of these functions can be included in a single
`dedicated microprocessor circuit 300. The computer 300
`essentially communicates with a number of on-board vehicle
`devices for acquisition of information representative of
`various actual vehicle operating characteristics. A driver
`input console 410 allows the driver to input data represen-
`tative of a need for assistance or for satisfaction of various
`threshold factors