Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Abandonment and Salvage

What it is:

Abandonment and salvage is a term that refers to one party's relinquishment of an asset and another party's subsequent claim to the asset.

How it works (Example):

Abandonment and salvage frequently appears in insurance contracts. Abandonment and salvage specifically states that if the owner abandons an insured asset or piece of property, the insurance company may rightfully claim it for salvage. The owner must express in writing his or her intent to abandon an asset or property.

For example, if someone abandons a house that has sustained heavy flood damage, the owner must provide a written notice of intent to abandon the house. The insurance company may then lay claim to the house and attempt to salvage it and resell it.

Why it Matters:

Salvage and abandonment can be lucrative for the salvaging party. For this reason, numerous parties may attempt to lay claim to an abandoned asset or property.

Related Terms View All
  • Auction Market
    Though most of the trading is done via computer, auction markets can also be operated via...
  • Best Execution
    Let's assume you place an order to buy 100 shares of Company XYZ stock. The current quote...
  • Book-Entry Savings Bond
    Savings bonds are bonds issued by the U.S. government at face values ranging from $50 to...
  • Break-Even Point
    The basic idea behind break-even point is to calculate the point at which revenues begin...
  • Calendar Year
    If Company XYZ starts its fiscal year on January 1 and ends its fiscal year on December...