Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
38% - Moderately

Abandonment Clause

Synonyms:desertion clause, fine print, give up, leave, relinquish, surrender
Filed Under: insurance, legal-contracts
Tags: clause, contract, legal

Definition of abandonment clause

abandonment clause
1. A clause found in some property insurance policies that allows the policyholder to abandon lost or damaged property, under certain specific circumstances, and still receive their full insurance benefits. For example, an abandonment clause can be used with marine property when recovering or repairing a lost or sunk ship might cost more than the value of the ship itself.

The above is an example of an abandonment clause found in a property insurance policy.

Related Terms and Acronyms:

  • abandonment   A disclaimer of ownership by the trustee or debtor in property deemed burdensome or inconsequential. Once property has been "abandoned" it is no longer the property of the estate and creditors can seek to recover their money.
  • insurance policy   A legal contract between an insurer and entity that specifies what the insurer is required to cover and any benefits the insured entity is entitled to.
  • waiver   The intentional and voluntary renunciation, abandonment, or surrender of some claim, right, or privilege.

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