What does Abandonment Clause mean?

It is a stipulation which can be found mentioned in a contract, whereby it is implied that the possessor of a property has the right to abandon it, in case an accident happens and he considers that the recovery of the prejudices would cost him way beyond its real value.

Abandonment Clause Explained

The first important mentioning is that generally this sort of insurance provision is present mostly in the case of Marine insurance policies. By it, the policy holder can take advantage of the fact that he can freely abandon his sunken ship for example, either because the required sum for rescuing it exceeds his financial capacities, or because it is simply not worth it. However, the insurer is under no obligation whatsoever to proceed to salvaging rights, and it is entirely up to the company's will.