For example, if I get car insurance and get into an accident, why should that increase my premiums. I’m insuring against that risk, so the fact that I had an accident surely shouldn’t change by risk factors.
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Insurance companies have a profit motive. Their profit directly from you is greatest when you pay for the service but don’t use the service. When you do use the service, the company’s profit declines slightly, but it can be recovered by charging you more in the future. Plus, if they promise to charge you enough extra in the future, it might discourage you from using the service unless absolutely necessary.
There is no existing and/or effective authority to prevent the company from doing this because we leveled up the free market perk to the max.
Gyms are another great example. They make more money when you don’t show up and exercise, causing wear and tear on their equipment, so scummier options take great pains to encourage you to sign up but discourage you from attending.
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