In what situation is discrimination permitted?

Discrimination is permitted in the context of crop insurance when there is an increased hazard due to location. This is because the risk associated with crop insurance is often tied to environmental factors, such as the likelihood of natural disasters, soil quality, climate conditions, and other localized agricultural risks. Under regulations, insurers can consider these geographic factors as legitimate reasons to differentiate premiums or coverage options, reflecting the true risk associated with insuring crops in a specific area.

In contrast, client age, past claim history, and gender are typically considered protected categories where discrimination should not occur. Age and gender are characteristics that do not inherently influence the risk related to crop insurance, whereas past claim history is a reflection of an individual's track record but must be applied uniformly and fairly under insurance guidelines to avoid unfair discrimination. Therefore, the correct scenario where discrimination is permitted solely hinges on the legitimate and measurable risk associated with a specific location.