Salvage in Insurance
Salvage usually refers to the remains of the property after a loss. Normally, as the result of a loss, the whole property is not lost, damaged or destroyed. Mostly, there remains some value in the damaged property or maybe it is a case of partial loss when the question of salvage becomes more prominent. Insurers receive salvage rights over the property on which they have paid claims, such as badly-damaged cars. Insurers that paid claims on cargoes lost at sea now have the right to recover sunken treasures.
The rule is that when it is a case of partial loss, the insured can only climb to the extent of the loss or damaged sustained. He cannot normally abandon the property claim the full. The insurance company may deduct the salvage value from the amount of the claim paid and leave the property with the insured. The situation may be different if only the insured surrenders the remains of the property and the insurer also agree to accept the salvage. In property insurance, salvage value will be subtracted from any loss settlement if the insured retains the damaged property. In such a situation, the claim shall be paid in full and the insurer shall become the owner of the salvage.