large claims of no less than $5>000, v±iich necessarily includes 

 total losses, made up only Q.k percent of aJ.1 cledjns but 68.1 

 percent of all paid losses in Nev England, 9-8 percent of cledms 

 and 70 '3 percent of losses in the Gulf Area, and 12.6 percent of 

 claims and 8I.7 percent of losses in California. The fact that 

 the mediaji paid loss per claim in California was almost twice as 

 large as the mediein in the other two areas does not substantially 

 alter the inverse relationship between frequency of claims and 

 amount of paid losses, although it is importajit in other respects. 

 Other things being equal, petty claims increase the cost of 

 insurance, since certain expenses for the adjustment of claims 

 are incurred, irrespective of the amount of paid loss. 



Additional classifications of the amount of paid loss per 

 claim are shown in table l4. All paid losses were quite ■unevenly 

 distributed among the three major classes of vessels (table ik) . 

 As might be expected, lost wood vessels accoiinted for the largest 

 amounts per claim in all three area^, but the percentages of all, 

 losses attributed to total loss of vessel differed greatly among 

 the three areas. Total losses constituted only 39 percent of eill 

 losses in New England, 50 percent in the Gulf Area, and as much 

 as 71 percent in California. The differences between the areas 

 is partly explained by differences in number and size of vessels 

 lost in each area and partly in the large number of petty claims 

 in the Gulf Area and particularly in New England. Of all partial 

 losses, active wood vessels were responsible for 56 percent in 

 New England, and 2i+ percent in each of the other tvro areas. 

 Active steel vessels contributed substantially only in the Gulf 

 Area--26 percent of all losses. 



The classification of paid partial losses by damaged part 

 of vessel and principal hazard reveals some interesting points. 

 Damage to hull only or to machinery and equipment only were 

 less severe than accidents damaging hull and, at the same time, 

 machinery in New England and the Gulf Area, both in terms of 

 amount of loss per claim and as percentage of all partial losses 

 (table Ik). In California, accidents damaging machinery and equip- 

 ment only, constituted as much as 57 percent of all partial losses 

 although, in terms of amount of loss per claim, accidents damaging 

 both hull and machinery were the most severe. In terms of pro- 

 portion of partial losses, navigation hazard was the severest in 

 the Gulf Area, followed by weather and mechanical failure. In 

 New England, weather (1953-5^ hux-ricanes) contributed the largest 

 proportion of partial losses followed by mechaniceLl failure and 

 navigation hazard. Mechanical failure was most important in 

 California with navigation hazard second and fire hazard third. 



67 



