`
`(12) United States Patent
`(10) Patent No.:
`US 6,868,386 B1
`
`Henderson et al.
`(45) Date of Patent:
`*Mar. 15, 2005
`
`USOO6868386B1
`
`(54) MONITORING SYSTEM FOR
`gagglgglfivnngI/iNNgFC'Oh/IMUNICATING A
`‘
`‘
`‘
`
`(75)
`
`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-Iake, 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.
`
`tt‘ b‘tt
`'I‘h'
`15 pa en 15 SH JCC
`claimer.
`
`’ld’-
`t
`O a ermina
`ls
`
`(21) Appl. No.: 09/571,650
`
`(22) Filed:
`
`May 15, 2000
`
`Related US. Application Data
`
`(63) Continuation-impart 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,
`“OW Pat- NO- 5,797,134-
`G06F 17/60
`(51)
`Int Cl 7
`.
`,
`,
` .
`8:; Field 0f Search
`705/4’ 3343623396 207561310
`”””””””””””””””360/5. 765/4 406
`’
`‘
`’
`
`(56)
`
`References Cited
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`
`32504337 A
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`
`3/1970 Ekm‘m ““““““““““““ 340/439
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`
`(List continued on next page.)
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`4
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`$8
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`
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`(
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`7159192
`{1333
`WO (Cg/79%;? A1 *
`9:9be
`W0 200052616 A2
`OTHER PUBLICATIONS
`
`Pasher, Auto Web site takes off, Mar. 1998, National Under-
`water (Property & Casualty/Risk & Benefits Management),
`V01, 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 Offering Online Auto Polic1es in 6 States, Dec.
`1998, Business Wire.
`
`(List continued on next page.)
`
`Primary Examiner%dward Cosirnano
`(74) Attorney: Agent,
`or Firm—Fay, Sharpe, Fagan,
`Miimich & 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-
`term 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 proiected usages.
`’
`
`17 Claims, 6 Drawing Sheets
`.~
`
`T
`
`
`
`—’
`510
`
`ACGUVRE EVEN
`
`
`
`.5.»
`
`,502
`STORED SENSOR DATAG
`
`«504
`
`A104
`
`
`
`
`
`
`\_/ DATA
`
`DATA
`PROCESS
`STORAGE
`LOGIC
`
`SENSOR DATAAND
`DATA PROCESS LOGIC ‘
`TR’GGER EVENTS
`ACQUIRE DATA
`\
`
`
`
`
`512\
`I
`516‘
`UPDATE UNIT OF
`
`\
`RISK
`STORE ALL EVENTS
`
`AND DATA
`DATAAND/OR EVENT
`PROCESSING
`
`EVENT OR
`CHARGES
`
`ALGORITHM
`DATA \
`
`550
`524
`
`NT
`
`ONLINE ACCOUNT
`ONLINE SERVICES
`DNLINE SERVICES
`FRODUCE
`EVE
`PERIODIC BILL
`/526
`STATEMENTS
`INTERFACE
`INTERFACE
`
`
`
` SPECIFIC EVENT
`4534
`
`
`
`
`PROCESSING
`[INCLUDING BUT NOT
`
`(INCLUDING BUT NOT
`(INCLUDING BUT NOT
`
`H
`IJMITED To: WHATIF
`LIMITED TO: MAPS
`ANDIOR ALERTS
`LIMITED TO: REAL-TIME
`
`
`ACCOUNT
`
`
`
` WITH USAGE, SERVICE
`SERVICES, MAPS
`GAMING, USAGE
`
`
`(a.g., CHARGE
`STATEMENTS
`GE DETAIL
`
`
`
`
`
`
`RESPONSE CMIMS.
`FER USE evans,
`PROJECT‘DNS)
`W'Lrgectii'igifim
`USA
`)
`GEOFENCINE.
`IMMEDIATE
`DIAGNOSTIC)
`EMS. POLICE)
`AUTOMOBILE SERVICE
`
`
`
`
`
`
`
`
`
`.
`I 1bert
`
`utua1
`
`V I
`
`Exhibit 1012
`
`Page 000001
`
`Page 000001
`
`
`
`US 6,868,386 Bl
`Page 2
`
`US. PATENT DOCUMENTS
`
`
`
`4,234,926 A
`4.2587421 A
`€533,962 A
`6608;638 A
`4,638,295 A
`4,667,336 A
`4,745,564 A
`1,763,745 A
`4,807,179 A
`4,829,434 A
`4831,32" A
`‘1843463 A
`1,843,378 A
`4351720 A
`4,939,652 A
`4,987,541 A
`4,992,943 A
`5,055,851 A
`5111389 A
`5,189,621 A
`5,223,844 A
`53197374 A
`5,359,528 A
`5,365,451 A
`5,430,432 A
`5,499,182 A
`5,500,806 A
`
`11/1980 Wallace et ill.
`............. 702/188
`~~ 701/35
`3/1981 11111851 6t a1~
`
`8/1985 Decker et 31-
`360/5
`364/424
`8“986 Tsikns --
`
`1/1987 Middlebrook et al.
`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 a].
`..
`360/5 X
`5/1989 Karmel et al.
`............ 74/866 X
`51:19:39 LthS 0} ‘11-
`~~~~~~~~~~~~~~~~ 364/401
`
`“/1989 M‘Che‘“
`358/108
`6/1989 Wade ......
`364/515
`8/1989 0mm et a].
`___________ 364/431_07
`
`7/1990 Steiner ........
`. 364/424.04
`. 364/42404
`/1991 Levente et al.
`
`2/1991 McCl'ackeIl ..
`364/42404
`
`10/1991 Sheffer
`342/457
`
`5/1992 Luca? Stal-
`358/108
`
`.
`. 364/431.04
`2/1993 Onari et al.
`6/1993 Mansell et al.
`.
`342/357
`
`
`6/1994 Desai et a1.
`343/387
`........ 364/42404
`10/1994 Haendel eta].
`11/1994 Wang et a].
`................ 364/449
`
`7/1995 Camhi et al.
`340/438
`3/1996 Ousborne .................... 701/35
`3/1996 Belliu et al.
`........... 364/52833
`
`8/1996 Nicol et a].
`................. 340/439
`5,548,273 A
`8/1996 Alesin ........................ 342/457
`5,550,551 A
`
`. 364/424.04
`6/1997 Comer et a1.
`5,638,273 A
`
`
`12/1997 Westerlage et al.
`705/417
`5,694,322 A
`.
`.. 705/400
`8/1998 McMillan et a1.
`5,797,134 A
`
`12/1998 Pescitelli et a1.
`705/4
`5,845,256 A
`9/1999 powerg .......................... 705/4
`5,956,691 A
`OTHER PUBLICATIONS
`
`“The Safest Cars of 91”, Baig, Edward U.S. News & World
`Report vl09, 1122, p. 71;Dec. 3, 1990,
`“Vendor’s Spice Up Services”, Robert Deierlein, Beverage—
`World, v109, n1467,p. 82; Jun. 1990.
`.
`.
`Rosenberg, Martin; Alexander, Shephen A. , Rate Clas51fi—
`cation Reform 1n New Jersey. Best’s Rev1ew (Prop/Casu-
`alty) V0~ 93~ N0~ 12,Pp- 30-31 APR 1993
`Kaneko, Tetsuya; Jovanis, Paul P. Multiday driving patterns
`and motor carrier accident risk. A disaggregate analysis.
`Accident Analysis and Prevention, vol. 24, N0. 5, pp.
`4377456 Jan 1 1992
`’
`'
`’
`,,
`'
`.
`Jan. 1, 1994 UK:
`'An Interest In Black Magic—Motor
`TeChHOng”,”WWI/“Age, 9 25
`“The Road Watches You”, The New York Times, May 3,
`1995, Wednesday, Late EditioniFinal, p. 23.
`
`* cited by examiner
`
`Page 000002
`
`Page 000002
`
`
`
`US. Patent
`
`Mar. 15, 2005
`
`Sheet 1 0f 6
`
`US 6,868,386 B1
`
`102
`
`104
`
`TRIGGER
`EVENT
`
`TRIGGER
`EVENT
`
`CONTACT
`CLAIMS
`DISPATCH
`?
`
`
`
`
`PROCESSING
`
`
`CONTACT
`CENTRAL
`
`
`CONTROL
`
`
`
`?
`
`
` CONTACT
`
`CONTACT
`CLAIMS
`CENTRAL
`
`
`
`DISPATCH
`CONTROL
`
`
`
`
`
`
`
`CLAIMS
`CENTRAL
`CONTROL
`DISPATCH
`
`
`
`TAKES
`TAKES
`
`
`
`APPROPRIATE
`APPROPRIATE
`
`
`
`ACTION
`ACTION
`
`
`
`
`
`
`
`RECORD
`RECORD
`CENTRAL
`CLAIMS
`
`
`
`CONTROL
`DISPATCH
`
`
`
`ACTION
`ACTION
`
`
`
`INFORMATION
`INFORMATION
`
`
`
`
`
`TRIGGER
`EVENT
`
`
` RECORD
`DATA
`
`DATA
`
`
`
`130
`
`Page 000003
`
`Page 000003
`
`
`
`US. Patent
`
`Bdar.15,2005
`
`Sheet2 0f6
`
`US 6,868,386 B1
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`
`
`US. Patent
`
`Mar. 15, 2005
`
`Sheet 3 0f 6
`
`US 6,868,386 B1
`
`FIG.3
`
`Page 000005
`
`Page 000005
`
`
`
`US. Patent
`
`Mar. 15, 2005
`
`Sheet 4 0f 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)
`
`
`
`
`ON-BOARD DATA LOGGING
`AND / OR COMMUNICATION
`DEVICE
`
`
`
`DRIVER INPUT
`CONSOLE
`
`ADDITIONAL
`SENSORS
`
`
`
`VEHICLE
`DATABUS
`AND , OR
`SENSORS
`
`NAVIGATION
`SUBSYSTEM
`
`412
`
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`
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`
`414
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`POSITIONING
`
`DEVICE (INCLUDING,
`BUT NOT LIMITED TO GPS,
`RADIO FREQUENCY
`
`TAGS, OR OTHER
`TECHNOLOGY)
`
`Page 000006
`
`Page 000006
`
`
`
`US. Patent
`
`Bdar.15,2005
`
`Sheets 0f6
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`US 6,868,386 B1
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`
`US. Patent
`
`Mar. 15, 2005
`
`Sheet 6 0f 6
`
`US 6,868,386 B1
`
`COLLECT UNDERWRITING DA'FKBTESRENCII-ITH
`
`AND RATING INFORMATION
`FROM CUSTOMER AND
`EXTERNAL SOURCES,
`FOR EXAMPLE: AGE,
`SEX, DRIVING RECORD,
`TYPE OF TELEMATIC
`
`CUSTOMER
`INFORMATION
`
`CUSTOMERS
`
`206
`
`THE RATING ALGORITHM
`
`UNIT, ETC.
`
`BASED ON THE
`
`COLLECTED INFORMATION,
`DEVELOP AND RECORD
`
`200
`
`
`
`UNIT OF RISK
`524
`DOWN LOAD RATING
`
`ALGORITHM TO
`
`TO DATA
`ON-BOARD DATA
`LOGGING AND
`LOGGING AND /OR
`
`
`
`COMMUNICATION
`COMMUNICATION
`
`
`
`DEVICE
`
`
`FIG. 6
`
`Page 000008
`
`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
`US. Ser. No. 09/135,034, filed Aug. 17, 1998, now US. Pat.
`No. 6,064,970 which is a continuation of US. Ser. No.
`08/592,958, filed Jan. 29, 1996, now US. Pat. No. 5,797,
`134. Arelated application is US. 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 connnunicated 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),
`
`5
`
`10
`
`15
`
`20
`
`30
`
`35
`
`40
`
`»
`
`6O
`
`65
`
`2
`
`-continued
`
`violations (citations);
`at fault accidents: and
`place of residence.
`Coverage:
`
`'l'ypes 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
`driving 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
`single
`
`1 point (speeding)
`3 points (one at fault accident)
`33619 (Zip code)
`
`yesno
`yes
`yes
`$100,000./$30C‘,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
`
`Page 000009
`
`
`
`US 6,868,386 B1
`
`3
`
`-con tinued
`
`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,
`
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`others are for more accurately assessing the e iciency 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 (U.S.
`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 efficiency 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
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`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 tinder-
`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 (i) 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 “progressivecom,”
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`US 6,868,386 B1
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`7
`and includes the content associated with a particular orga—
`nization. As used herein, the term is generally intended to
`encompass both (i) 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.
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`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:
`
`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 which need to be satisfied before the
`vehicle can be operated.
`For example, a driver authentication system is intended,
`such as where several individual drivers (same family, etc.)
`may properly use the vehicle but each may have different
`ratings for insurance computations.
`The physical operation of the vehicle is monitored
`through various sensors 412 in operative connection with the
`vehicle data bus, while additional sensors 414 not normally
`connected to the data bus can be in direct communication
`with the computer 300 as will hereinafter be more fully
`explained.
`The vehicle is linked to an operation control center 416 by
`a communications link 418, preferably comprising a con-
`ventional cellular telephone interconnection, but also com-
`prising satellite transmission, magnetic or optical media,
`radio frequency or other known communication technology.
`A navigation sub-system 420 receives radio navigation
`signals from a positioning device 422 which may include,
`but is not limited to GPS, radio frequency tags, or other
`known locating technology.
`The type of elements monitored and recorded by the
`subject invention comprise raw data elements, calculated
`data elements and derived data elements. These can be
`broken down as follows:
`Raw Data Elements:
`Power train sensors
`RPM,
`transmission setting (Park, Drive, Gear, Neutral),
`throttle position,
`engine coolant temperature,
`intake air temperature,
`barometric pressure,
`Electrical sensors
`brake light on,
`turn signal indicator,
`headlamps on,
`hazard lights on,
`back—up lights on,
`parking lights on,
`wipers on,
`doors locked,
`key in ignition,
`key in door lock,
`horn applied,
`Body sensors
`airbag deployment,
`ABS application,
`level of fuel in tank,
`brakes applied,
`radio station tuned in,
`seat belt on,
`door open,
`tail gate open,
`odometer reading,
`cruise control engaged,
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