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The claims department at ABC Insurance Company believes that younger drivers have more accidents and therefore, should be charged higher insurance rates.

The company took a sample of $1,200$ policyholders revealed the following result on whether a claim had been filed in the last three years and the age of the policyholder.

The results were:

Age 16 to 25: 70 (no claim) and 74 (claim)
Age 25 to 40: 240 (no claim) and 58 (claim)
Age 40 to 55: 400 (no claim) and 44 (claim)
Age 55 or older: 190 (no claim) and 24 (claim)

Using a $0.05$ significance level, what is the appropriate null hypothesis in this study?

A

The null hypothesis is that insurance rate is not independent of age of policyholder.

B

The null hypothesis is that insurance rate is related to age of policyholder.

C

The null hypothesis is that the difference between the observed and expected frequencies is small.

D

The null hypothesis is that there is no relationship between insurance rate and age of policyholder.

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