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Legal Dictionary
  • Abandonment Clause
Abandonment Clause
“Abandonment clause” is a clause in a property insurance contract. The clause permits the property owner to abandon lost or damaged property and still claim a full settlement amount under certain circumstances. 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. Typically, this insurance clause comes into play with marine property insurance, such as boats or watercraft. Thus, 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/her property and subsequently collect a full insurance settlement from the insurer.