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Exhibit 10.1

COST ALLOCATION AGREEMENT
BETWEEN
ZENITH NATIONAL INSURANCE CORP.,
ZENITH INSURANCE COMPANY,
ZNAT INSURANCE COMPANY,
CALFARM INSURANCE COMPANY,
CALFARM LIFE INSURANCE COMPANY,
AND
CALFARM INSURANCE AGENCY

THIS AGREEMENT is made with reference to the following facts:

A.Zenith National Insurance Corp. (Zenith National), Zenith Insurance Company
(Zenith), ZNAT Insurance Company (ZNAT), CalFarm Insurance Company (CalFarm),
CalFarm Life Insurance Company (Life), and CalFarm Insurance Agency (Agency),
share facilities, and certain employees of each perform services for the other.

B.Zenith National, Zenith, ZNAT, CalFarm, Life, and Agency desire to agree as to
the basis for allocating costs to each other for shared facilities and
employees.

        NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants herein contained, Zenith National, Zenith, ZNAT,
CalFarm, Life, and Agency do hereby enter into this Agreement and do hereby
agree as follows:

1.Term.    The term of this Agreement shall be for a period of one year and
shall automatically be renewed each year unless terminated by Zenith National,
Zenith, ZNAT, CalFarm, Life, or Agency by giving ninety (90) days' prior written
notice that it will not renew the Agreement.

2.Compensation.    Costs of shared facilities will be allocated to each party
based on a cost allocation system which utilizes factors for space occupied.
Costs of services provided by employees will be allocated to each based upon the
cost allocation system and time related to another entity's interest. In
addition, expenses incurred on behalf of a party (including, for example, bureau
and association dues, travel expenses, supplies, etc.) shall be charged to the
party on whose behalf the expenses were incurred. Expenses shall be paid by all
parties and charged to the appropriate party based on the procedure set forth
herein. The net balance of payments and charges will be maintained in separate
inter-company accounts and payments will be made to the appropriate parties on
these accounts at least quarterly.

3.Records and Accounting.    All records necessary, proper and customary for the
operations to be performed by the parties under this Agreement shall be properly
maintained by each party for and on behalf of each of the other parties. Such
records shall be the separate property of each party. These records shall be
available, upon reasonable notice, for inspection, audit or other use by
authorized representatives of the Subsidiaries or by governmental authorities.

4.Amendments.    This Agreement may be modified, amended or terminated at any
time by mutual consent, provided, however, that any such modification, amendment
or termination must be in writing and executed by officers of Zenith National,
Zenith, ZNAT, CalFarm, Life, and Agency.

5.Indemnification.    Zenith National, Zenith, ZNAT, CalFarm, Life, and Agency
hereby agree to indemnify and hold each other harmless for any loss occasioned
by the negligent acts or omissions of the officers or employees of each.

6.Non-Assignability.    The rights, obligations, duties and authority under this
Agreement are not assignable by any party hereto.

7.Termination of Agreement.    Any party may terminate its participation in this
Agreement upon ninety (90) days' written notice.

8.Governing Law.    This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

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        THIS AGREEMENT is executed this 31st day of December, 1990, to be
effective as of January 1, 1991.

    ZENITH NATIONAL INSURANCE CORP.               By:   /s/  FREDRICKA
TAUBITZ      

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FREDRICKA TAUBITZ
Executive Vice President                         ZENITH INSURANCE COMPANY      
        By:   /s/  PHILIP R. HUNT      

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PHILIP R. HUNT
Vice President                         ZNAT INSURANCE COMPANY               By:
  /s/  JOHN J. TICKNER      

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JOHN J. TICKNER
Vice President                         CALFARM INSURANCE COMPANY              
By:   /s/  FREDRICKA TAUBITZ      

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FREDRICKA TAUBITZ
Senior Vice President                         CALFARM LIFE INSURANCE COMPANY    
          By:   /s/  PHILIP M. JOFFE      

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PHILIP M. JOFFE
Vice President                         CALFARM INSURANCE AGENCY              
By:   /s/  JOHN J. TICKNER      

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JOHN J. TICKNER
Senior Vice President

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COST ALLOCATION AGREEMENT BETWEEN ZENITH NATIONAL INSURANCE CORP., ZENITH
INSURANCE COMPANY, ZNAT INSURANCE COMPANY, CALFARM INSURANCE COMPANY, CALFARM
LIFE INSURANCE COMPANY, AND CALFARM INSURANCE AGENCY