Abandonment Clause

AAA

DEFINITION of 'Abandonment Clause'

A clause in a property insurance contract that, under certain circumstances, permits the property owner to abandon lost or damaged property and still claim a full settlement amount. If the insured party's property cannot be recovered, or the cost to recover or repair it is more than its total value, it can be abandoned and the insured party is entitled to a full settlement amount.

INVESTOPEDIA EXPLAINS 'Abandonment Clause'

This type of insurance clause typically comes into play with marine property insurance, such as boats or watercraft. If a property owner's ship is sunk or lost at sea, the abandonment clause affords the owner the right to essentially "give up" on finding or recovering his or her property and subsequently collect a full insurance settlement from the insurer.

RELATED TERMS
  1. Hazard Insurance

    Insurance that protects a property owner against damage caused ...
  2. Premium

    1. The total cost of an option. 2. The difference between the ...
  3. Insurance

    A contract (policy) in which an individual or entity receives ...
  4. Casualty Insurance

    A broad category of coverage against loss of property, damage ...
  5. Multiline Insurance

    An insurance instrument used to bundle the risk exposures of ...
  6. Insurance Claim

    A formal request to an insurance company asking for a payment ...
Related Articles
  1. 5 Insurance Policies Everyone Should ...
    Home & Auto

    5 Insurance Policies Everyone Should ...

  2. Insurance 101 For Renters
    Options & Futures

    Insurance 101 For Renters

  3. Insurance Myths Involve Houses, Cars ...
    Insurance

    Insurance Myths Involve Houses, Cars ...

  4. What's the difference between renter's ...
    Insurance

    What's the difference between renter's ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center