What is Abandonment (in insurance)?

In marine and cargo insurance, giving up the insured property in favour of the insurer and claiming the full amount of the loss. It is used in the case of a "constructive total loss": the property has not been physically destroyed, but the cost of saving it or repairing it and delivering it to its destination exceeds its value. Under the United Kingdom's Marine Insurance Act 1906, the insured may choose in such a case: treat the loss as a partial loss, or abandon the property and recover it as if it were an actual total loss. To abandon, the insured must send the insurer a notice of abandonment; without the notice, the loss can only be treated as a partial loss. In an actual total loss (when the property has been destroyed) no notice is required.

Source: Marine Insurance Act 1906, sections 57, 60–62