What is 'salvage' in insurance claims?

Salvage is damaged property that retains some value after a loss. Common examples: a vehicle declared a total loss but with salvageable parts; damaged inventory that can be sold to discount buyers; building materials worth salvaging from a fire-damaged structure. When the insurer pays the full ACV or replacement cost for a total loss, it typically takes title to the salvage and disposes of it (often through salvage auctions). The proceeds from salvage offset the insurer's loss payment, lowering effective costs. Adjusters handle salvage by: (1) Recognizing salvage potential during inspection; (2) Documenting condition; (3) Coordinating with salvage companies for retrieval and sale; (4) Tracking salvage value as part of the claim. Salvage rights vary: some policies give the insured the option to retain damaged property at salvage value; some leave it to the insurer. For total-loss vehicles, the salvage title indicates the vehicle was previously totaled, affecting its resale value. Buyer-protection rules require salvage title disclosure. Auto salvage is a major industry; vehicles are sold to repair shops, parts dealers, exporters. Building salvage is less commonly pursued unless valuable (antiques, fixtures, custom millwork). Salvage management is one part of effective claims handling that reduces the net cost of losses.