What term applies when the insured attempts to abandon property to gain full value from their insurance?

The correct term for the situation where an insured attempts to abandon property to receive its full value from their insurance is abandonment. This concept is important in insurance as it revolves around the idea that an insured cannot simply surrender property to the insurer and expect a payout for its full value, especially if they still retain some interest in the property.

In replacement value situations, insured parties are typically required to mitigate damages and retain ownership of the property throughout the claim process. Abandoning property could lead to moral hazard, as it incentivizes individuals to neglect their responsibility to maintain and manage their property.

Understanding the concept of abandonment in the context of insurance reinforces the principle that insurers are providing coverage to protect against loss rather than enabling insured parties to profit from their misfortunes. In some instances, abandonment can also lead to difficulties in adjusting claims and determining appropriate compensation.

The other terms—deductible, indemnity, and subrogation clause—represent different insurance principles and practices that do not pertain specifically to the act of abandoning property with the intent to gain full value from insurance coverage.