You could do that, but then you would have to make them pay more upfront, and given the choice, the likely result would be a fewer people purchasing insurance.

The entire concept of insurance is that of a risk pool. If you get the math right, there’s nothing left at the end of the year. All the money that was paid in by all the insured, has been spent reimbursing the random portion of insured to whom bad shit happened to.

Of course, part of getting the math right is understanding the risk profile of all the people you’re insuring. If you have a legal way to determine that some people are way less riskier than others, then you can put those very safe people in their own risk pool and charge them much less, which encourages people to be more careful,I think is what you’re getting at.

But it only works if you have some legal statistical method to figure out with reasonable accuracy, who is less risky upfront. If you can’t do that, then your idea boils down to running a lottery scheme (get paid if nothing happens to you!) on top of an insurance scheme. (Get paid if something happens to you!).