NEW YORK (MainStreet) — Insurance companies often reward their long-term customers with "loyalty" rate discounts. But those savings might be outpaced by increased premium rates, according to the Consumer Federation of America (CFA).

"You may have been with your auto insurance company for many years," said J. Robert Hunter, director of insurance at CFA in a release. "You may even receive a loyalty discount of 5 or 10% on your bill. You have filed few or even no claims during your years with the insurer. You are a great customer and it may seem that there's no reason to complain about your auto insurance."

But Hunter says consumers should be aware of "new auto insurer pricing schemes."

"Your insurer may be increasing your premium by far more than your loyalty discount, precisely because you have been so loyal," he says. "Even if you have a perfect driving record, many insurance companies are raising rates on people just like you – people who do not shop around. Newly revealed insurance practices show that reasons you might be vulnerable to price increases are such things as staying with one insurer for many years, never calling the company with complaints or simply buying your insurance through an agent rather than online."

The CFA says the so-called "scheme" is a practice known as "price optimization," referred to as "PO" in the industry.

Compiling consumer data and statistical models, insurers determine how likely a consumer is to shop premium prices – and how much of a rate hike a customer is likely to tolerate. Using this "price elasticity of demand," insurers raise rates accordingly, regardless of customer claim histories or driving records.

Millions of drivers are overcharged, based on their risk profile, because many insurance companies -- including about half of the largest firms -- raise premium rates for consumers who are not likely to leave their company, according to the CFA.

"Even before the advent of price optimization, it was very important to shop for insurance since prices vary so widely," said Hunter. "But now, to avoid being POed, shopping is critical."

Deloitte Research conducted in 2011 revealed that, while price is the main consideration when purchasing insurance, nearly one-quarter of policyholders never price-shop their current auto insurance when it renews. Fully 30% of auto policyholders never change their carrier.

The CFA is telling consumers to call their state's Insurance Commissioner and urge him to prohibit insurance companies from using price optimization practices that "unfairly raise rates on customers."

--Written by Hal M. Bundrick for MainStreet