only. Dropped it because it was too high. Could pay for boat in 

 eight years with money spent on hvill insurance • " Another owner 

 remarked that "Cost (meaning premiums for hull insurance) equals 

 10 percent of value of boat." The frequent comment of the inter- 

 viewed owners, "rates too high", indicates fairly we2J. their plight. 

 This is consistent with the fact that noninsured vessels are much 

 smaller than insvired vessels in all three area^ (table 2). In terms 

 of market value, which may be assximed to indicate the approximate 

 aversige amount of insurance, the average insured vessel is more than 

 four times larger than a noninsured one in New England, more than 

 twice in the Gulf Area, and almost seven times as large in California. 



Protection and Indemnity Insurance 



Among the vessel's physical characteristics, small size seems to 

 be the only important factor for noninsurance because vessel size more 

 or less determines the size of the crew on board. Thus, with the 

 exception of the Gulf Area where other conditions prevail, the average 

 crew on insured vessels is twice as large as on noninsured vessels in 

 New England and three times larger in California (table 2). Owner's com- 

 ment such as "do not need protection and indemnity while working for 

 myself" or the phrase "small crew, protection and indemnity not desired" 

 illustrates this point. But mere smallness of crew is not the only or 

 an adequate condition. Invariably, crew size is related to other 

 nonphysical characteristics of the vessel. 



2. Vessel's nonphysical characteristics . 



Hull Insiirance 



Vessel ownership . VThen the vessel is captained by the owner, or 

 he is a one-vessel owner, such a vassal is less likely to be insured 

 for hull. This is evidenced by the fact that in New England only 63 

 percent of the captain-owned vessels are insured while »"n insured 

 vessels represent 77 percent of the sample . These percentages are 

 52 and 62 in California, respectively (table 5)- Here is how one 

 interviewer employed in the survey reports it: "Because of present 

 health, owner feels that insurance is needed when vessel is not 

 captained by owner." The opposite is true when a vessel is owned 

 by a dealer, or a processor, or in absentia. In other words, where 

 the captain has no interest or only partial interest in the vessel, 

 or when the owner operates many boats, each hull is likely to be 

 insured. At first glance, the Gulf Area seems to be an exception, but 

 actually the deviation is largely the result of statistical limitations. 

 The truth of the matter is that noninsiorance is more extensively 

 practiced among fleet operators in the Gulf than one-vessel owners. 



28 



