What is an example of unfair discrimination in insurance?

Providing different terms of coverage for different policyowners who have the same risk classification is a clear example of unfair discrimination in insurance. This practice violates the principle of fairness, which dictates that individuals with similar risk profiles should receive comparable terms and conditions. If two policyholders present the same level of risk, they ought to have access to the same policy features, premiums, and benefits. When terms differ without justifiable reasons related to risk, it leads to an inequitable situation where one individual might be paying more or receiving less coverage despite being in the same risk category as another.

This principle is rooted in ensuring that insurance is fair and accessible, which upholds consumer trust in the insurance system. By maintaining consistency in how risks are evaluated and classified, insurance providers can avoid discriminatory practices that disadvantage certain individuals unfairly, thus fostering an equitable market.