Marine Hull Insurance. Extent of Hull Insurance.

    This branch of the marine insurance business is the second most important division after the cargo insurance. As contrasted with cargo insurance, hull policies usually run for a period of time, like a year, and owing to the longer duration of the risk, the underwriter's capital is turned over much less frequently. The premium, also, is usually a much larger percentage of the amount of insurance, ranging in annual time policies from five to six per cent on the average steamer.

    Comparatively few American companies, or the branch offices of foreign admitted companies, derive more than one-third of their marine premium income from hull insurance. In fact, of the sixty-three American companies which reported their figures only thirteen derived fifty per cent or more of their premium income from this branch of the business. One-third received less than twenty per cent, and one-half less than thirty- three per cent. The practice of exporting marine insurance directly to the foreign market, without the insurance passing through the medium of any American underwriting office by way of reinsurance, is resorted to particularly in case of hull insurance. Competent underwriters have estimated such exported insurance to be at least fifty per cent of all American hull insurance. Fifty-one of the sixty-three companies referred to reported that they did not emphasize hull insurance. Twelve companies explained that they have found their hull business to be unprofitable, considering a period of years; fourteen reported that they found only a small profit in hull insurance in pre-war times, while at present the situation is still more unfavorable because the enormous increase in the cost of repairs and salving has not been accompanied by a corresponding increase in premiums; and sixteen state that competition of companies located in foreign countries, and the facility with which owners and brokers export marine insurance to such countries, preclude any hope of reasonable success.

     Types of Hull Policies Classified. Vessels are customarily grouped into four main types, namely, sail, auxiliary sail, steamers and power boats. Each of these broad classes presents its peculiar problems to the underwriter, and these must be met through the use of specially adapted policies and endorsements. Later it will be shown how underwriters cooperate in so-called underwriters' associations like the American Hull Underwriters Association, the Atlantic Inland Association, American Schooner Association, Provincial Underwriters' Association, Yacht Association, and Steam Schooner Agreement (Pacific Coast) for the purpose of adopting uniform conditions and practices with respect to various types of hulls. A further classification is possible, depending on the nature of the waters navigated or the particular use served by the vessel in question. Thus there are policies labeled as " steamboat only," " tug," "yacht," "whaling and fishing," "canal hull," "schooner," "barge," "lake hull," "river hull," etc. While these various policies resemble each other in their general form and essential features, there are nevertheless important differences, especially by way of additional clauses designed to adapt the insurance to the varying conditions that prevail in the given trade or with respect to the particular vessel under consideration.

     Each of the foregoing classes of hull policies may be divided into " voyage " and " time " policies. Voyage policies cover the risk pertaining to a given trip which is usually defined as beginning at a specific port, extending possibly to one or more intermediate ports, and ending at a specified time following the arrival of the vessel at a designated port of destination. Time policies, on the contrary, are not limited geographically, but attach at a stated date and continue in force for a stated period of time, with the customary provision for an automatic renewal for a stated period in case the vessel should be on a voyage at the expiration of the term. In England the maximum time limit of term policies is one year, but in the United States no such limitation exists. In practice, however, American policies are almost always limited to one year, although at times they are written for a shorter period.