195l|-55> a rise of about 90 percent. In evaluating these findings, 

 one should keep in mind the previous remarks on the effects of 

 averaging and other qualifications. The financial burden caused 

 by the rise in insurance cost was distributed during 1950-5^ 

 quite unevenly among the insured vessel owners and the over-all 

 experience in each area may have been worse than is shown by the 

 sample . 



2. The cost of instirance in terms of coverage . In contrast 

 to hnll insxirance, there are no definite signs that the cost of 

 protection and indemnity insurance has increased in New Englaxid 

 in terms of coverage. The coverage index shows that a New England 

 owner wa^ buying more dollar protection for the money he was paying. 

 In 1950-51 he paid, on the average, $l6l for $10,000 of insurance 

 liability, while only $lkh was required for the same amoirnt of 

 insurance in 195^-55 (table 10). A further extension of coverage 

 is indicated by the fact that the average amount, both for 

 deductibles for personal injury and property damage, fell during 

 the five-year period. Finally, the percentage of policies with 

 coverage of the owner on board for maintenance and cisre increased, 

 indicating further liberalization of the contractual terms. Against 

 this extension of the coverage stands the doubling of the percentage 

 of policies with deductible clauses. (Also see table A-32, New 

 England in Appendix A for more detailed information.) It would be 

 correct to conclude that coverage for protection and indemnity 

 insurance decreased only if we assume that the decrease in coverage 

 caused by the increase of the policies with deductibles more than 

 offsets the increase in coverage brought about by the liberalization 

 of the other contractual terms. Again, averaging may understate the 

 rise in the cost of insurance. In view of our experience, however, 

 it is more reliable to conclude that the extent of coverage in New 

 Englsmd largely remained unchajiged and the rise in the cost of 

 InsurcLnce came about almost entirely through the increase in premium. 

 Perhaps the unchanged coverage may explain, in part, why the rise 

 in gross premi\jm for protection and indemnity insurance was sub- 

 stantially greater than the rise in gross premium for hull insurance 

 in both absolute and relative terms, as discussed above. 



Apart from the smallness of sample size, the same conclusion 

 may be reached for the experience in the Gulf Area. Contrastingly, 

 the findings in California indicate an increase in cost for protec- 

 tion and indemnity in terms of coverage. A California owner paid 

 $27 for $10,000 of insurance liability in 195O-51, while the 

 premium rose to $^+3 for the same amount of insurance in 1954-55. 



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