In property insurance, what is salvage?

• A. Salvage refers to recovered damaged property after a loss, which the insurer may salvage or sell to offset costs.
• B. Salvage is the premium return on a lapse.
• C. Salvage is the process of filing a claim with the third party.
• D. Salvage is the portion of the claim paid by the insured.

Answer: (C)

Salvage in property insurance refers to the damaged property that remains after a loss and the insurer’s right to take possession of it and sell it to recover part of the claim. This salvage value helps offset the insurer’s costs, reducing the net payout. It’s not about filing a claim with a third party (that’s related to subrogation), nor about the insured’s share of the claim or any premium refund on lapse.