Which of the following factors is most likely to increase insurance premiums?

Living in a high-risk area is indeed a significant factor that is likely to increase insurance premiums. Insurance companies assess risk based on various variables, and one of the most crucial is the environment in which the insured risk exists. High-risk areas may refer to regions with a history of frequent natural disasters, high crime rates, or other characteristics that elevate the likelihood of accidents or losses occurring. When individuals or businesses are situated in such locales, insurers anticipate a greater probability of claims, leading them to increase premiums accordingly to cover potential losses.

The other options—improved local infrastructure, low crime rates, and being an experienced driver—generally indicate lower risk. Enhanced infrastructure can lead to fewer accidents and better emergency response, which could reduce claims. Low crime rates usually associate with a decreased chance of vandalism or theft, further lowering potential risks for insurers. Experience in driving typically translates to fewer accidents and claims, providing a safer profile for insurers and often resulting in lower premiums. Hence, these factors are not likely to contribute to increased insurance costs, making the selection of living in a high-risk area the most impactful in raising premiums.