If an insurer charges different premium rate and limits coverage for an applicant based on partial blindness, the insurer may be found guilty of?

• A. Unfair discrimination
• B. Churning
• C. Misrepresentation
• D. Boycott

Answer: (A)

Unfair discrimination is at play when an insurer treats someone differently because of a disability, rather than based on actual risk factors that affect loss. In underwriting and rating, premium amounts and coverage decisions should reflect the insured’s real risk, not their disability. Using partial blindness to raise premiums or limit coverage assigns a disadvantage based on a protected characteristic, which state laws and insurance fairness rules prohibit.

Churning, misrepresentation, and a boycott describe other concepts—policy replacements for commission, false statements, and collective refusal to deal—none of which capture the act of discriminating due to disability.