Explanation

Reading the question: we can use opinion-charged words to identify the pieces of the argument here. "Clearly" introduces the conclusion. The word "however" also is a clue: it tells us that the first sentence is a data point, not just filler. The logical structure is: A is true, but B is true, therefore C is true. A is the difference in cost in home insurance between these two cities, B is the rate of theft. The argument is not too strong.

Creating a filter: as the page summarizing the Critical Reasoning Strategy mentions, a prediction of the correct answer, even a vague or unrealistic prediction, is most powerful filter to evaluate answer choices. Predicting isn't always easy, but on this question, there are many reasons why insurance companies might have to pay more for losses in Springfield than in Shelbyville. Maybe the thieves in Springfield are more skilled and they manage to steal more per theft than in Shelbyville. That possibility is unlikely to be an answer choice, but we can still use it: "thieves in Springfield are more skilled and steal more."

Applying the filter, we evaluate the answer choices. Choice (B) is actually pretty close to our prediction. Choice (C) involves auto rates, which wouldn't shed light on this question without further information. (D) and (E) also involve comparisons with other things that we know nothing about, so they cause problems rather than solve problems. Back to (A), we can see it doesn't directly concern whether companies profit more from fewer thefts. Notice that our prediction was quite different from choice (B), but it was similar enough to help us spot (B) quickly.

Logical proof: we can use analysis by extreme cases to establish that choice (B) is correct. If the losses per theft were identical in Shelbyville and in Springfield, the conclusion would be true and the argument would stand; if they were wildly different, the conclusion could be false. The correct answer is (B).