With actual insurance, you aren't paying for other people. Your premiums are based on the expected value of your future claims. The financial incentive helps p

With actual insurance, you aren't paying for other people. Your premiums are based on the expected value of your future claims. The financial incentive helps preserve that property: If a company can identify the cheaper customers, then they can offer lower premiums than the companies that can't. The customers left behind are more expensive, forcing those premiums to rise in order to remain solvent.