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What would happen to your car insurance premium if the insurance company could only look at your accident, ticket and claim history? Are you a model of safe driving who has never cost the company a dime, or do you re-enact "The Fast and the Furious" any time you can get out of first gear? Either way, how much you pay for coverage would closely mirror your history behind the wheel.

Add in other factors, such as how many miles you drive, your years of driving experience and the vehicle’s safety rating, and insurance companies have a lot of data that can help them set a fair price for your policy.

However, that’s not how most premiums are set.

Instead, when insurance companies are allowed to slice, dice and price us they include a whole host of factors that have absolutely nothing to do with driving safety or experience. I’ve been testing companies’ premiums all across Michigan, and I’ve found that drivers’ socioeconomic and personal characteristics, as well as their ZIP code, play an oversized role in determining how much they have to pay to comply with Michigan’s mandatory auto insurance law.

In just about every insurance quote I’ve tested over the past year, I find penalties for good drivers whose primary “flaw” is that they are not financially well-off. You can be a perfect driver, but if you have a blue-collar job you pay more for insurance than a banker or lawyer; if you don’t have a college degree you pay more; rent your house, lose your spouse, get a ding on your credit score and it’s more, more, more. Unemployed? That’ll hike your rates, too.

Sometimes it hardly matters that your driving history is pristine. Consumer Reports magazine found that a Michigan driver with a clean record but a low credit score pays an average annual premium of $5,725, while a driver who was convicted of driving under the influence but has excellent credit would pay $5,744. That makes the benefit for a lifetime of perfect driving — with no DUIs — all of $19, or less than one percent.

Even having an above-average credit score rather than an excellent credit score can cost a good driver in Detroit hundreds or thousands of dollars annually, according to my research. But the outrageous quotes don’t stop there. Some customers paid $200 to $300 more because they rent their home instead of own it, and that’s before getting the discount for bundling homeowners and auto insurance. Drivers who could no longer check the married box after their spouse died saw premiums increase $200. Call it a “widow penalty.”

The unfairness of charging drivers more simply because they don’t match a preferred high-income profile is amplified when you consider the pricing contortions that happen when these preferred drivers prove to be unsafe on the road. I found, for example, one major company quoting a janitor with a clean record but a short lapse in coverage $848 more than it quotes a highly educated executive who recently caused an accident.

Not all companies use all of these non-driving factors to penalize their customers, but most of the companies deploy at least some of these schemes to raise rates on good drivers just because they don’t fit insurers’ preferred profit profile. This is particularly problematic because insurance is a product the Legislature requires us to buy and authorizes the police and courts to hold us accountable if we don’t.

In addition to our personal circumstances, our ZIP codes still weigh heavily on premiums. Not only are the price disparities evident when comparing far-flung towns with Detroit; insurers use ZIP code borders in Detroit as another way to punish the poor. It turns out that two good drivers living within 100 yards of each other but on opposite sides of Mack Avenue will pay shockingly different premiums. One major company charged double — about $4,000 more — to someone on the Detroit side of Mack compared with someone living on the Grosse Pointe side of the street.

There is no way that two people who pull out of their driveway and see the exact same intersection can legitimately be charged such dramatically different premiums for basic coverage.

It is no surprise that when insurance companies lobby in Lansing they don’t talk about these unfair pricing practices. More surprising is that Mayor Duggan’s proposals have not addressed the systemic discrimination that impacts so many Detroiters, even as several Detroit legislators are fighting to eliminate these non-driving rating factors.

The cost of auto insurance should reflect our driving and send signals to customers that if we are safe we’ll get the best deal. But now, the signal insurance companies send is that if you want to lower your premium you should go back to school, get a better job, improve your credit score, and, maybe, move in with your neighbor.

Douglas Heller is an independent insurance expert and consumer advocate who works with consumer protection organizations around the country and the CPAN in Michigan.

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