00:00Ever feel like companies are getting one over on you when it comes to prices? Well,
00:08they kind of are. It's called price optimization. See, as NerdWallet explains it,
00:13price optimization is the practice of charging higher rates based on the likelihood that a
00:18person will not shop around for a lower price. Car insurance companies create algorithms based
00:23on all kinds of personal data, including loyalty to other providers and shopping habits. Consumer
00:28Reports details how seven years ago, Allstate Insurance asked to run their customers'
00:33premiums through an algorithm to update costs. The markup and Consumer Reports analyzed the
00:38algorithm and found it actually produced a sucker's list of big spenders who paid more.
00:43Others in underserved communities feel they're overcharged. Yahoo Finance reports that Consumer
00:48Watchdog just called for an overhaul of rules from the California Department of Insurance in
00:53order to stop auto insurance companies from overcharging drivers without college degrees
00:58or without white collar or other highly paid occupations. As NerdWallet advises,
01:03it always pays to shop around and compare prices before buying an insurance policy or anything else for that matter.
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