Does The Insurance Industry Discriminate?

First, let's admit that this article title and question is tricky; but the answer is yes. Not only is discrimination practiced by every insurance company; discrimination is absolutely critical to the industry. The practice is also quite legal and rightfully so! Before going further, let's remember that discrimination can have more than one meaning. How may discrimination be defined? Let's use a very large dictionary, say Webster's Encyclopedic Unabridged Dictionary Of The English Language (Deluxe Edition):

1. the act or an instance of discriminating.(differentiating or noting differences), 2. Not applicable, 3. treatment or consideration of, or making a distinction in favor of or against, a person or thing based on the group class or category to which that person or thing belongs rather than on individual merit.

Unfair Discrimination?

The confusion over the desirability or legality of discrimination arises out of unfair discrimination. Unfair discrimination stems from the latter definition mentioned earlier. A choice that is based on a group, class or category. Choices that revolve around a distinction that is irrelevant to offering insurance coverage is unfair discrimination. The best (or worse) example of this is to deny coverage based upon an arbitrary difference such as race or religion.

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