A protection setting determiner (118) adaptively updates settings of protection functions in memory of a protection device (106) that protects a machine (102) that provides power to a power system (104), wherein the settings are updated based at least in part upon sensed data acquired during operation of the machine (102). A physical parameter determiner (110) receives the sensed data, which includes three-phase voltage and three-phase current values at the terminals of the machine (102), and uses any suitable real-time or off-line parameter estimation technique (such as Kalman Filtering for an augmented state) to determine physical parameters of the machine (102) and the power system (104). The protection setting determiner (118) uses the physical parameters to update the protection settings.