Fig. 3 shows insurance statistics on the number of car accidents per 1000 drivers in relation to the age of drivers. These statistics are used by insurance companies to calculate insurance premiums. [Figure 3 Car accidents per 1000 drivers and driver age] Use Fig. 3 to help you answer the following questions.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

1. [1] How many car accidents per 1000 drivers have drivers aged between 25-34 had? 80
2. [2] 1 mark for reason and 1 mark for explanation Lack of experience (1) will encounter road conditions never met before (1) More likely to take more risks (1) e.g. cutting in and out of traffic / driving too fast or wanting to speed (1) Night driving (1) more likely to be going out / drive more at night than older drivers (1) Distracted while driving (1) e.g. use of mobile phone / friends in car (1) Drinking (1) impact on ability to drive correctly / more reckless (1)
3. [3] 1 mark for each correct answer TRUE FALSE An example of sustainable transport is encouraging people to use public transport. ✔ City traffic congestion contributes to increased greenhouse gases. ✔ Electric car development is a social factor affecting commercial activity. ✔
4. [6] Insurable interest - the insured must have a direct / financial interest in the asset insured, i.e. they must own the car. This is important because otherwise someone could insure something just to make a profit, rather than to protect against loss. Utmost good faith – both the insurer and the insured must reveal all the relevant facts and tell the truth. This is important because an insurer can refuse to pay any compensation if the questions on the proposal form have not been answered truthfully or relevant facts had been omitted. The insured might lie to reduce the premiums they have to pay but if the insurer finds out they are very likely to declare the contract void. Indemnity - is when the insured is returned to the same position after a loss as they were in before the loss, with no profit being made. This is important so the car owner can claim back the amount they have lost. Contribution - where someone insures for the same risk with more than one insurance company. Each insurance company will contribute towards payment of the claim. Subrogation – when an insurance company pays out compensation to the value of the car but the damaged item then becomes the property of the insurance company. Evaluation: Insurable interest is important when insuring a car because you must be the owner of the insured car. Indemnity is also important so you can start again from the same position as before the loss / replace the car. However, utmost good faith is probably the most important principle because if the insured has been dishonest they could lose everything / be unable to replace the car which they might need to travel to work.