Auto-insurance companies have long used factors other than acustomer's driving record to underwrite and price risks. Today,though, the Consumer Federation of America (CFA) has called on allstate-insurance commissioners to crack down on insurers that raiserates on customers who are more likely to stick with the samecompany.

“It has never been more important to shop around for autoinsurance, no matter how long you have been with your currentcompany,” says Robert Hunter, CFA's director of insurance, in astatement. “Even if you have a perfect driving record, manyinsurance companies are raising rates on people just likeyou—people who do not shop around.”

Through a method called “price optimization,” insurers quantify(among other things) your likelihood of sticking with the companyand then adjust rates based on their analysis. Hunter calls thepractice unfair and dishonest.

Last September, he similarly called for an end to priceoptimization after the insurance industry consulting firm, Earnix,released a report that said a large amount of companies wereadopting price-optimization models in ways similar to how theyadopted credit-based insurance models.

The best way for consumers to protect themselves, according toHunter, is to shop around and compare rates.

David Snyder, vice president of international policy at PropertyCasualty Insurers Association of America (PCI), tells PC360 priceoptimization is not as simple as CFA says. “The auto-insurancemarket is highly competitive and we certainly support well informedconsumers who shop from time to time,” he says “But priceoptimization is more nuanced and complicated than the CFAindicates. We would take issue with the one-dimensional picturethat the CFA painted.”