[A005]
The actual provision in an insurance contract, usually ocean marine, inland marine or property, that refers to abandonment and whether or not it is allowed by that particular policy.
1) In ocean marine insurance, the transfer by the insured to an insurer of all rights, title, and interest in and to the insured property, in return for the sum insured. It is effected by the insured's tender of such transfer (notice of abandonment) and the insurer's acceptance. A valid tender can be made only when the facts show that there has been a "constructive total loss" or "actual total loss" of the insured property through an insured cause of loss. In such case, however, the insured can recover the sum insured as for a total loss, even though the insurer has refused to accept the tender and there has been no "abandonment."
2) The word also appears in "sue and labor" clauses of various inland marine policies by way of a stipulation that compliance with the requirements of the clause shall be without prejudice to either the insured or the insurer respecting waiver or acceptance of abandonment.
3) In property insurance, abandonment is relinquishing ownership of damaged property to an insurer to permit a total loss claim to be made, but most commercial property coverage forms, dwelling policies, and the homeowners policy prohibit such abandonment. Instead, these policies require the insured to protect damaged property from further loss.
Copyright: The Rough Notes Company, Inc., 1998, All Rights Reserved. 3040100