other things being equal, the larger the crew the larger the amount 

 at stake and the greater the probability of loss. In hull insurance 

 the amount at stake is largely conditioned by gross tonnage as a 

 measure of the vessel's value while age, other physical chaxacteristics, 

 and the human element reflect the probability of loss. Of course, the 

 amount at stalie and the probability of loss may vary irrespective of 

 crew size, but still the variability \ri.ll be reflected through this 

 single factor. Therefore, in places where crew size is the main 

 criterion, the expectation of loss should be estimated relatively 

 more accurately than in hull insurance . 



It will be se-r;n in table 29 that, in terms of net premium ratio 

 or gross premium per crewrasm, protection and indemnity insurance in 

 New England was costlier for owners of vessels with worst loss record 

 ($16 for $1,000 amount of insuremce or $222 per cre-\vman) than for 

 owners of vessels with best loss record ($13 for $1,000 amount of 

 insurance or $193 per crewman) . But this cost differential is largely 

 offset by a coverage which is more liberal for worst than for best 

 vessels. Only 15 percent of contracts of worst vessels included a 

 deductible clause on personal injury and 32 percent on property 

 damage. For best vessels, the figures were 38 percent and kh percent 

 respectively. Furthermore, 6I percent of the contracts of worst 

 vessels covered the oimer on board for maintenance and cure, while 

 only U8 percent of contracts of best vessels provided the same. 

 Most important, deductible amounts for both personal injury and 

 property damage were smaller among worst vessels ($195 Q^d. $l8'?, 

 respectively) as compared to the corresponding amounts for best 

 vessels ($2^3 and $240). Therefore, there seems to "jq no 

 significant difference in the cost of insurance between best and 

 worst vessels. (For rating of vessels on the basis of their loss 

 record, see Chapter V.) 



Since no losses were reported in the Gulf Area sample, a rating 

 dichotomy of vessels could not be obtained. It is very interesting 

 to note, however, that during 1950-5^ the cost of protection and 

 indemnity insurance in the Gulf Area was higher than the cost of 

 insurance of best New England vessels. Although the premium in 

 the Gulf Area was $128 per crewman as compared to $193 per crewman 

 of best New England vessels, a Nevr England owner of a vessel paid 

 $1 less per $1,000 of insurance than a Gulf Area owner. In addi- 

 tion, with the exception of the provision covering the owner on 

 board for maintenance and cure, all other terms of the contract 

 indicate greater coverage for the best New England vessels than in 

 the Gulf Area. Of course, considering premium per crewman and 

 absolute premium paid, the out-of-pocket cost of insiirance was 

 higher in New England than in the Gulf Area. 



121 



