What term describes unfair discrimination based on location rather than risk characteristics?

The term that describes unfair discrimination based on location rather than risk characteristics is redlining. Redlining refers to the practice where insurance companies or other financial institutions deny or limit services to residents of certain areas based on the perceived risk associated with those locations, rather than the individual risk profile of applicants. This practice typically targets areas with a high percentage of low-income or minority residents, resulting in systemic inequities in access to insurance and financial services.

The significance of understanding redlining lies in its implication for fair treatment and equal opportunity in the insurance market. Unlike pricing practices that are based on individual's risk assessments, redlining is a broader discrimination based on demographics and geography, which raises ethical and legal concerns.

Recognizing this term is crucial for adjusters and industry professionals, as it emphasizes the importance of fair and equitable treatment across all geographic locations, ensuring that all insured parties have access to necessary services regardless of where they live.