Imagine you just bought a gallon of milk at the store. Soy, 2 percent, chocolate — whatever your flavor is.

The person in line behind you has the same item, sees what you paid and throws their hands in the air.

“No way I’m paying that. I can get the same thing down the street for a dollar cheaper.”

So the cashier tells them: “OK, OK. I’ll sell it to you for a dollar less if you buy here.” Sold.

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Sounds nuts, right?

Luckily, that type of exchange doesn’t happen at the supermarket, but it can rear its head in the insurance market.

It’s a practice called “price optimization,” a way for insurance companies to charge different premiums to people who are more likely to cost the insurer the same amount in claims and expenses.

Here’s how: An insurer uses advanced software and rating models to determine insurance rates through formulas based on how much a consumer might be willing to pay before they would shop around for a better price. It’s like some sort of twisted crystal ball.

For example, two consumers share the same auto insurance company, maybe the one with the British lizard or the exhaustingly upbeat woman in the apron.

Both customers have similar driving records and credit ratings. Both pay the same premium. But the insurance company discovers one of the consumers is shopping around for a better deal and offers that consumer a discounted rate to remain aboard, while the other consumer continues paying a higher rate.

Pennsylvania insurance laws forbid the practice, as do lawmakers in at least 10 other states.

Teresa Miller, state insurance commissioner, said the department has notified insurers within the Commonwealth that Gov. Tom Wolf and his administration would not approve such premiums. Miller’s department has been working to spread awareness about the practice throughout the state, she said in a statement.

“In short, this practice takes advantage of a customer’s loyalty to a company,” Miller said.

Miller instructed homeowners and auto insurance customers to discuss any increases to their premiums with their insurance agent. If the agent can’t provide a reasonable explanation for the hike, shop around for a better price.

Pennsylvania, she noted, has a highly competitive insurance market with many options available to consumers.

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By Joe Dolinsky

jdolinsky@timesleader.com

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Have you been wronged by a business? Have you been the victim of a scam? Joe Dolinsky, our Consumer Watchdog, is here to help. To reach Joe, email ConsumerWatchdog@timesleader.com.

Reach Joe Dolinsky at 570-991-6110 or on Twitter @JoeDolinskyTL