Method and apparatus for rating geographical areas using meteorological conditions

• US 5,839,113 A
• Filed: 10/30/1996
• Issued: 11/17/1998
• Est. Priority Date: 10/30/1996
• Status: Expired due to Fees

• Current Assignee: Okemos Agency Incorporated
• Original Assignee: Okemos Agency Incorporated
• Inventors: Federau, Douglas L., High, Frederick, Fringer, William L.
• Primary Examiner(s): McElheny, Jr., Donald E.
• Application Number:
  US08/740,505
• Time in Patent Office: 748 Days
• Field of Search: 702/3, 702/4, 702/15, 705/4
• US Class Current: 705/4
• CPC Class Codes: G06F 17/10 Complex mathematical operations function generation by table look-up G06F1/03; evaluation of elementary functions by calculation G06F7/544
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A method and apparatus for rating geographical areas based on the severity and/or frequency of different meteorological conditions. To determine the rating of a geographical area, raw data information from meteorological charts is gathered. The raw data scale for each meteorological condition is divided into ranges. The distribution of the geographical areas over the entire scale is determined. Individual rating factors are assigned to each of the ranges based on the distribution of the geographical areas throughout the scale. The individual rating factors are preferably selected such that the incremental change in the individual rating factors between ranges is preferably proportional to the incremental change in the number of geographical areas between the same ranges. All the individual rating factors for a single geographical area are used to calculate a cumulative rating factor for the geographical area. The cumulative rating factors of all the geographical areas are compared to provide a ranking of the geographical areas. The ranking relates to the risk potential in each geographical area based on the meteorological conditions. The resulting ranking of geographical areas is used to determine the insurability of a structure in a geographical area.

Claims

1. A method for ranking geographical areas based on a plurality of meteorological conditions, which comprises:

(a) providing a meteorological chart of the geographical areas for each of the meteorological conditions to be ranked, each chart showing a severity and/or frequency of the meteorological condition in each of the geographical areas;

(b) selecting ranges of the severities and/or frequencies of the meteorological condition for all of the geographical areas;

(c) calculating rating factors for each of the ranges of severities and/or frequencies of the meteorological condition;

(d) determining the individual rating factor for each of the geographical areas for each of the meteorological conditions;

(e) calculating a cumulative rating factor for each of the geographical areas using the individual rating factors for each of the meteorological conditions for the geographical area; and

(f) ranking the geographical areas based on the cumulative rating factors of each of the geographical areas.

2. The method of claim 1 wherein the cumulative rating factor is a summation of the individual rating factors for each meteorological condition.

3. The method of claim 1 wherein when the severity and/or frequency of the meteorological condition is zero, in the geographical area, the individual rating factor for the geographical area for the meteorological condition is zero.

4. The method of claim 1 wherein the meteorological conditions are selected from the group of wind, tornado, lightning, hurricane, earthquake, freeze days, temperature and precipitation.

5. The method of claim 1 wherein one of the meteorological conditions is wind.

6. The method of claim 5 wherein the individual rating factor for wind in between -0.056 to +6.002.

7. The method of claim 5 wherein the severity and/or frequency of wind in the geographical area is determined based on peak winds over the past ten years in the geographical area.

10. The method of claim 1 wherein one of the meteorological conditions is tornadoes.

11. The method of claim 10 wherein the individual rating factor for tornadoes is between -0.056 to 2.656.

12. The method of claim 10 wherein the severity and/or frequency of tornadoes in the geographical area is determined based on the number of tornadoes in the geographical area per 10,000 square miles averaged over the past ten years.

13. The method of claim 12 wherein the ranges of severity and/or frequency of the tornadoes are:

space="preserve" listing-type="tabular">______________________________________ 0.000-0.499 0.500-0.999 1.000-1.999 2.000-2.999 3.000-3.999 4.000-4.999 5.000-5.999 6.000-6.999 7.000-7.999 8.000-8.999 9.000-9.999 ≧

10.000 ______________________________________

14. The method of claim 13 wherein the individual rating factors for each range of severity and/or frequency of tornadoes are:

space="preserve" listing-type="tabular">______________________________________ 0.000-0.499 = -0.056 0.500-0.999 = -0.028 1.000-1.999 = 0.000 2.000-2.999 = 0.056 3.000-3.999 = 0.069 4.000-4.999 = 0.083 5.000-5.999 = 0.166 6.000-6.999 = 0.332 7.000-7.999 = 0.644 8.000-8.999 = 1.328 9.000-9.999 = 1.992 ≧

10.000 = 2.656 ______________________________________

15. The method of claim 1 wherein one of the meteorological conditions is lightning.

16. The method of claim 15 wherein the individual rating factor for lightning is between -0.056 to 1.157.

17. The method of claim 15 wherein the severity and/or frequency of lightning of the geographical area is determined based on the number of thunderstorm days per year in the geographical area.

18. The method of claim 17 wherein the ranges of severity and/or frequency of lightning are:

space="preserve" listing-type="tabular">______________________________________ 0.000-0.999 = 0-10 Thunderstorm days per year 1.000-1.999 = 11-20 Thunderstorm days per year 2.000-2.999 = 21-30 Thunderstorm days per year 3.000-3.999 = 31-40 Thunderstorm days per year 4.000-4.999 = 41-50 Thunderstorm days per year 5.000-5.999 = 51-60 Thunderstorm days per year 6.000-6.999 = 61-70 Thunderstorm days per year 7.000-7.999 = 71-80 Thunderstorm days per year 8.000-8.999 = 81-90 Thunderstorm days per year 9.000-9.999 = 91-100 Thunderstorm days per year 10.000+ = 101-110 Thunderstorm days per year ______________________________________

19. The method of claim 18 wherein the individual rating factors for each range of severity and/or frequency of lightning are:

space="preserve" listing-type="tabular">______________________________________ 0.000-0.999 = -0.056 1.000-1.999 = -0.028 2.000-2.999 = -0.028 3.000-3.999 = 0.000 4.000-4.999 = 0.056 5.000-5.999 = 0.069 6.000-6.999 = 0.083 7.000-7.999 = 0.097 8.000-8.999 = 0.111 9.000-9.999 = 1.139 10.000+ = 1.157 ______________________________________

20. The method of claim 1 wherein one of the meteorological conditions is earthquakes.

21. The method of claim 20 wherein the individual rating factor for earthquakes is between 0.010 to 2.000.

22. The method of claim 20 wherein the ranges of severity and/or frequency of earthquakes are:

space="preserve" listing-type="tabular">______________________________________ 0.000-0.999 1.000-1.999 2.000-2.999 3.000+ ______________________________________

23. The method of claim 22 wherein the individual rating factors for each range of severity and/or frequency of earthquakes are:

space="preserve" listing-type="tabular">______________________________________ >

0.000 = 0.010 >

1.000 = 0.025 >

2.000 = 1.000 >

3.000 = 2.000 ______________________________________

24. The method of claim 1 wherein one of the meterological conditions is hurricanes.

25. The method of claim 24 wherein there are five ranges of severity and/or frequency for hurricanes.

26. The method of claim 25 wherein the five ranges of severity and/or frequency for hurricanes are:

space="preserve" listing-type="tabular">______________________________________ 74-95 MPH 96-110 MPH 111-130 MPH 131-155 MPH >

156MPH ______________________________________

27. The method of claim 26 wherein the rating factors for each of the ranges of severities and/or frequencies for hurricanes are:

space="preserve" listing-type="tabular">______________________________________ 74-95 MPH = 0.500 96-110 MPH = 1.000 111-130 MPH = 1.500 131-155 MPH = 2.000 >

156MPH = 2.500 ______________________________________

28. The method of claim 27 wherein the individual rating factor for each of the geographical areas for hurricanes is determined by multiplying the number of hurricanes in each range of severity and/or frequency by the rating factors for that range and then adding the results for all the ranges together.

29. The method of claim 1 wherein a weight associated with each of the individual rating factors for each meteorological condition is adjustable.

30. The method of claim 1 wherein the ranges of the severities and/or frequencies are selected such that the geographical areas are evenly distributed throughout the range.

31. The method of claim 3 wherein the cumulative rating factor for each of the geographical area is calculated using the equation

32. The method of claim 1 wherein the geographical areas are counties in all 50 states of the United States.

33. The method of claim 1 wherein the lower the cumulative rating factor for the geographical area the lower the risk of damage in the geographical area as a result of the meteorological conditions.

34. The method of claim 1 wherein a chart having terrain characteristics of the geographical areas is provided and wherein a terrain factor is determined from the chart for the geographical area and wherein the terrain factor is used with the cumulative rating factor in ranking the geographical areas.

35. The method of claim 31 wherein X_W, X_T, X_L, X_E and X_H are equal.

8. The method of claim 8 wherein the ranges of severity and/or frequency of the wind are 0 to 70 MPH;

71 to 75 MPH;

76 to 80 MPH;

81 to 85 MPH;

86 to 90 MPH;

91 to 95 MPH;

96 to 100 MPH;

101 to 105 MPH;

106 to 110 MPH;

111 to 115 MPH;

116 to 120 MPH;

121 to 125 MPH;

126 to 130 MPH;

131 to 135 MPH; and

136 to 140 MPH and greater than 140 MPH.

9. The method of claim 9 wherein the individual rating factors for each range of severity and/or frequency of wind are:

space="preserve" listing-type="tabular">______________________________________ 0 to 70 MPH = -0.056 71 to 75 MPH = 0.000 76 to 80 MPH = 0.056 81 to 85 MPH = 0.069 86 to 90 MPH = 0.083 91 to 95 MPH = 0.166 96 to 100 MPH = 0.332 101 to 105 MPH = 0.664 106 to 110 MPH = 1.328 111 to 115 MPH = 1.994 116 to 120 MPH = 2.660 121 to 125 MPH = 3.316 126 to 130 MPH = 3.982 131 to 135 MPH = 4.648 136 to 140 MPH = 5.314 >

140 MPH = 6.002 ______________________________________

36. The method for determining the insurability of a physical structure located in a geographical area, which comprises:

(a) providing a rating database in a computer having a cumulative rating factor for a plurality of geographical areas wherein the cumulative rating factor is calculated using the equation

space="preserve" listing-type="equation">R.sub.N =X.sub.W F.sub.N (W)+X.sub.T F.sub.N (T)+X.sub.L F.sub.N (L)+X.sub.E F.sub.N (E)+X.sub.H F.sub.N (H)

wherein N is the geographical area R_N is the cumulative rating factor for the geographical area, F_N (W) is a wind rating factor for the geographical area, F_N (T) is a tornado rating factor for the geographical area, F_N (L) is a lightning rating factor for the geographical area, F_N (E) is the earthquake rating factor for the geographical area, F_N (H) is a hurricane rating factor for the geographical area and wherein X_W, X_T, X_L, X_E, and X_H are weighting factors for each of the meteorological condition;

(b) accessing the rating database to retrieve the cumulative rating factor for the geographical area;

(c) providing a rating chart showing the insurability for the cumulative rating factors; and

(d) comparing the cumulative rating factor for the geographical area with the rating chart to determine the insurability of the structure located in the geographical area.

37. The method of claim 36 wherein X_W, X_T, X_L, X_E and X_H are equal to 1.

38. The method of claim 36 wherein X_W, X_T, X_L, X_E and X_H are different values in the equation.

39. The method of claim 36 wherein a client database can be generated in the computer to provide a list of clients associated with the geographical areas.

40. The method of claim 39 wherein the rating database is accessed using the client database to determine the insurability of a structure owned by a client in the geographical area.

41. The method of claim 36 wherein a liability database can be generated having a gross liability factor and a net liability factor for the geographical areas wherein the gross liability factor and the limited liability factor are considered with the cumulative rating factor to determine the insurability of the structure in the geographical area.

42. The method of claim 36 wherein the database is formed using a method for ranking geographical areas based on a plurality of meteorological conditions, which includes:

providing a meteorological chart, information of the geographical areas for each of the meteorological conditions to be ranked, each showing a severity and/or frequency of the meteorological condition in each of the geographical areas;

selecting ranges of the severities and/or frequencies of the meteorological condition for all of the geographical areas;

calculating individual rating factors for each of the ranges of severities and/or frequencies of the meteorological condition;

determining the individual rating factor for each of the geographical areas for each of the meteorological conditions; and

calculating a cumulative rating factor for each of the geographical areas using the equation.

43. The method of claim 36 wherein the lower the cumulative rating factor for the geographical area the greater the insurability.

44. The method for determining the insurability of a physical structure located in a geographical area from a database, which comprises:

(a) providing a plurality of charts, each chart having information relating to a severity and/or frequency of a meteorological condition for a plurality of geographical areas;

(b) selecting a range of rating factors representing the severities and/or frequencies of each meteorological condition for the plurality of geographical areas;

(c) calculating a rating factor for each geographical area for each meteorological condition;

(d) combining the rating factors for each of the meteorological conditions for each of the geographical areas to provide a cumulative rating factor for each of the geographical areas;

(e) inputting the geographical areas and the corresponding cumulative rating factors into a computer to form the database;

(f) forming a chart showing an amount of for the cumulative rating factors;

(g) retrieving the cumulative rating factor from the database for the geographical area where the structure is located; and

(h) comparing the cumulative rating factor for the geographical area with the chart to determine the amount of for the geographical area.

45. A media operational for use in storing a database for use in a method for determining the insurability of a physical structure located in a geographical area, which comprises:

providing a database on the media having a cumulative rating factor for a plurality of geographical areas wherein the cumulative rating factor is calculated using the equation

space="preserve" listing-type="equation">R.sub.N =X.sub.W F.sub.N (W)+X.sub.T F.sub.N (T)+X.sub.L F.sub.N (L)+X.sub.E F.sub.N (E)+X.sub.H F.sub.N (H)

wherein N is the geographical area R_N is the rating factor for the geographical area, F_N (W) is a wind rating factor for the geographical area, F_N (T) is a tornado rating factor for the geographical area, F_N (L) is a lightning rating factor for the geographical area, F_N (E) is the earthquake rating factor for the geographical area, F_N (H) is a hurricane rating factor for the geographical area and X_W, X_T, X_L, X_E and X_H are weighting factors for each of the meteorological conditions;

accessing the database to retrieve the cumulative rating factor for the geographical area;

providing a rating chart showing the insurability for the cumulative rating factors; and

comparing the cumulative rating factor for the geographical area with the rating chart to determine the insurability of the structure located in the geographical area.