A self-insurance plan becomes more and more adveintageous the 

 larger the premium required for insurance protection. On the other 

 hand our inquiry did not disclose extensive use of self-insurajice. 

 In fact, no vessel owner at present operates a fleet large enough 

 to enable him to self -insure against all insurable risks. A limited 

 and well administered self-insureuice plan, however, coupled with 

 excess insurance carried with private risk carriers deserves the 

 attention of both the vessel owners and the insurance iieople. 



Noninsurance reduces the number of risks to be insured ajid 

 therefore limits the operation of the law of averages. Moreover, 

 apart from the widely accepted belief that insuraoice by itself has 

 the tendency to increase the hazard, there are a few indications 

 that the majority of noninsured vessels, especially in the Gulf 

 Area may be better risks than the currently insured vessels. To 

 the extent that this may be tnae, a plan inducing noninsured 

 owners to carry insurance on their vessels may finally lower 

 the cost of insurance protection for eill insured owners. Although 

 theoretically correct, this observation is subject to various 

 qualifications to be discussed later. 



The remainder of this report is focused on insured commercial 

 fishing vessels only. 



^5 



