What is Abandonment and Salvage?
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 Does Abandonment and Salvage Work?
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 Does Abandonment and Salvage Matter?
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.
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