Abandonment And Salvage

AAA

DEFINITION of 'Abandonment And Salvage'

An expression that describes the forfeiture of property and the ensuing claim over that property by a second party. Abandonment and salvage can be added as a clause in an insurance contract; this gives the insurance company the ability to accept the abandoned property. Abandonment must be expressed with intent. The potential financial rewards mean that salvage rights are sometimes legally contested by several parties.

INVESTOPEDIA EXPLAINS 'Abandonment And Salvage'

Salvage and abandonment clauses are usually found in marine insurance contracts. For example, if a vessel sinks and the owner thinks it would be too expensive to reclaim the ship, he or she could declare it abandoned. The insurance company could then claim ownership and salvage rights to the sunken ship. Advancements in technology have made it possible and financially viable to reach previously inaccessible wrecks, resulting in increased salvage claims.

RELATED TERMS
  1. Residual Value

    How much a fixed asset is worth at the end of its lease, or at ...
  2. Admiralty Liability

    A risk, event or conduct that would run afoul of admiralty (maritime) ...
  3. Insurance Claim

    A formal request to an insurance company asking for a payment ...
  4. Abandonment Option

    A clause granting parties the option of withdrawing from the ...
  5. Abandonment

    1. The act of surrendering a claim to, or interest in, a particular ...
  6. Insurance

    A contract (policy) in which an individual or entity receives ...
Related Articles
  1. Retirement

    Top 7 Estate Planning Mistakes

    Many people try to avoid this process altogether, making things difficult for heirs.
  2. Home & Auto

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  3. Entrepreneurship

    Will Insurance Keep Your Business Safe?

    Skilled employees are key to a successful business. Find out how to avoid a financial setback if they leave.
  4. Home & Auto

    5 Insurance Policies Everyone Should Have

    Insurance policies come in a wide variety of shapes and sizes. Shop carefully and the right policies will go a long way towards helping you protect your assets.
  5. Retirement

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  6. Options & Futures

    Getting Started On Your Estate Plan

    With some preparation, you can save your heirs from paying a hefty estate tax. Here are some tips.
  7. Insurance

    Homeowners Insurance Losers: States That Pay Most

    Which states charge you the most for homeowner's insurance? Hint: They're regularly featured on the Weather Channel.
  8. Professionals

    Helping Clients Choose Long-Term Care Insurance

    The need for long-term care has become an inescapable (and pricey) issue for retirees. Here's what financial advisors can do to help.
  9. Stock Analysis

    3 Things That Could Hold Intuitive Surgical Back

    Taking a long-term view that favors Intuitive Surgical developer increasing in value, doesn't mean that there are near-term headwinds facing this company.
  10. Insurance

    Life Insurance: How Much Does Age Raise Your Rate?

    If you need life insurance, try to get it before your next birthday. Here's why.

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center