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Progressive Sues Hartford, State Farm Alleging Patent Infringement on Auto Coverage

Posted on 03 May 2012

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Pay As You Go CoverageProgressive Corp. filed patent-infringement lawsuits against State Farm Mutual Automobile Insurance Co. and Hartford Financial Services Group Inc. (HIG) over auto coverage based on vehicle usage.

The insurers are infringing three patents that related to vehicle monitoring and ways the monitoring is used to determine insurance rates, Progressive contends. Both complaints were filed yesterday in federal court in Cleveland.

The complaints target Hartford’s “TrueLane” and State Farm’s “Drive Safe & Save” initiatives. The programs get data regarding location, mileage, speed and other information from an onboard computer to calculate a “safety score” on the driver.

“Progressive is suffering from the effects” of the infringement by the two companies, the Mayfield Village, Ohio- based company said in the complaints.

State Farm, based in Bloomington, Illinois, is the biggest U.S. home and car insurer. The company developed its program “to provide the opportunity for additional discounts to our customers and reinforce and reward their safe driving habits,”said Dick Luedke, a spokesman for State Farm. “We have just learned of this complaint. We will look into the issue and provide our response to the court.”

Hartford, based in the Connecticut municipality of the same name, offers its TrueLane in Connecticut, Minnesota, Missouri, Oregon, and West Virginia, said Thomas Hambrick, a spokesman for Hartford.

Reducing Premiums

In TrueLane, “we offer auto policyholders the opportunity to reduce premiums by demonstrating safe driving habits through the installation of a telematics device in their vehicle,” he said in a statement. “The Hartford denies Progressive’s allegations and intends to defend the lawsuit vigorously.”

Progressive, the fourth-biggest U.S. auto insurer, has sued Allstate Corp. and Liberty Mutual Holding Co. over similar programs. It settled with Allstate, while the case against Liberty Mutual is scheduled for a mediation conference May 3, according to the court docket in that case.

The cases are Progressive Casualty Insurance Co. v. Hartford Fire Insurance Co., 12cv1070, and Progressive Casualty Insurance Co. v. State Farm Mutual Automobile Insurance Co., 12cv1068, both U.S. District Court for the Northern District of Ohio (Cleveland).