Almost every vessel •vrtilch carries protection and indemnity 

 insurance is also likely to carry hull insxirance except in the Gulf 

 Area where 50 percent of the vessels insured for hull but only 17 

 percent for protection and indemnity risk. 



2. Wonlnsurance based on gross tonnage and market value . 

 The extent of noninsurance is much less if noninsurance is measured 

 in terms of gross tonna^ and reported market value of vessel rather 

 than in number of vessels (table l) . Thus, in terms of gross tonnage, 

 noninsurance for hull is only 11 percent in New England and California, 

 ajid rises to 43 percent in the Gulf Area. Also noninsurance for pro- 

 tection and indemnity is 12 percent, 13 percent, and 80 percent in 

 the area^, respectively. Except for California, noninsurance in terms 

 of market value of vessel is even less extensive than in terms of 

 gross tonnage . 



In terms of gross tonnage, of the estimated J+5,800 gross tons of 

 active vessels in New England only about 5^000 gross tons were not 

 insured for hull and 5^500 did not carry insurance for protection and 

 indemnity. From an estimated total of 57^100 gross tons of active 

 vessels in the Gulf Area the noninsured gross tonnage is estimated 

 at about 24,500 for hull and 4-5,700 for protection and indemnity. 

 Noninsurance for hull is estimated at about 11,000 and for protection 

 and indemnity at 13,000 gross tons out of a totsil gross tonnage of 

 about 99,400 in California. 



Similarly, of the $27.9 million estimated market value of active 

 vessels in New England only $2.5 and $2.7 million were not insured 

 for hull and protection and indemnity, respectively. The noninsured 

 market value is estimated at $13-9 million for hull and $29.4 million 

 for protection and indemnity out of a $38.7 million total market 

 value of £lL1 active vessels in the Gulf Area while in California, 

 noninsurance figures are estimated at $8.4 million for hull and $9.1 

 for protection and indemnity out of a total current market value of 

 $65.0 million. 



Although in terms of gross tonnage and market value of vessel, 

 noninsurance is less important than it seems to be in terms of number 

 of vessels, the above findings indicate that noninsurance is extensively 

 practiced in the Gulf Area and to a much lesser degree In New England 

 and California. How can one explain the extent of noninsurance which 

 the figures indicate? What are the reasons for noninsurance? Finally, 

 how does this situation affect the insurance problem? In the remainder 

 of this chapter an attempt will be made to answer these questions. 



21 



