In contrast to the other areas, prenivmis for protection and 

 indemnity insui'ance in California are not determined on the basis 

 of crew size. This method unduly favors vessel ovmers with large 

 crews and places at a disadvantage small crev; vessels. One owner 

 from that area coraients on this method as follows: "1-Jhen I first 

 inquired, I thought it unfair that it costs the same amount to 

 insure one man as a crew of ten." 



On the other side of the ledger lies the fact that advantageously 

 low rates to fleet ovmers or to oi'jner cooperatives seem to have improved 

 the chances of occurrence or diminished tlie chances of c ancellations of 

 insurance contracts. Also, extensive overvaluation by insurers, apart 

 from its undesirable consequences (which will be discussed later) seems 

 to have contributed to more vessels being insured for hull, although 

 in a fevx instances overvaluation may have had the opposite results. 

 Ejccept for these general observations, jjisurance practices differ so 

 widely and are so changeable as to defy any attempt to discuss them 

 systematically withJ.n the space allotted for this report. 



The oimer's image of insurance business . The mental image which 

 the oii.Tie'r has of the people \<rho supply him vjith insui'ance protection 

 seems to be more uruavorable than favorable. (The owner's comments 

 on the teiTis of the insurance contract and on the adjustment of claims 

 will be analysed in later chapters. Here, the owner's general opinion 

 of insurance agents or brokers arjd insurance corgpanies will be examined 

 to the extent that it may be a cause of noninsurance.) As many as 

 three out of every four New England vessel OT-.Tiers who commented on 

 insurance practices were critical of incui^ance companies, and about 

 two out of three are critical of insurance agents or brokers. In the 

 Gulf Area these percentages are 62 percent and 3U percent, respectively. 

 The California owners seem to be less critical since only 33 percent 

 of the responding ovmers expressed aaa unfavorable opinion of insurance 

 companies arid II4 percent of insurance agents or brokers, (table A-129 

 in Appendix A) . The percentage of ovmers viith an unl'avorablo opinion 

 might have been higher, especially on insurance agents or brokers, had 

 it not been for tlie fact that afevi ovmers are directly or indirectly 

 connected iilth the insurance business a.id if it is assumed that the 

 majority of non-respondents declined to express their opinion largely 

 because of their critical attitude tov;ard the insiu^ance business. 

 Quite a fov/ vessel o;mers vjere coricemed lest the interview they had 

 v/ith our field vjorker was a nevf approach for selling insurance. 



The general consensus of ovmers having unfavorable comments is 

 that insurance people are grossly mifair, they use too much pressure 

 in order to sell insurcjice, they do not keep their promises, and they 

 are getting rich from undenn:'iting vessels. An interviev;er describes 



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