Salvage-What a policy holder needs to know.

Most people who take out Insurance Policy`s have absolutely no idea what salvage is all about. Hopefully after reading this simple explanation you will understand what it means.

If an Insurer pays for a total loss let`s say you claim for a new rug for your sitting room after a coal from the fire falls on it and burns a small hole.  Because Indemnity (cover under the policy for the claim) has been  accepted by your insurance company and they have paid for a replacement rug then the damaged rug becomes salvage and the Insurers can take the item and sell it to recoup some of the money they paid to settle the claim.

They may often offer the salvage to the policy holder who may decide to buy it back at the reduced price so he can put it in a spare room or playroom where they are not to concerned that it has a small bit of damage.

Savage would apply also with for example the theft of jewellery from a house and where the Insurers have paid to replace the item or items and the Gardai subsequently get the property back during the course of there investigation. Insurers as this stage will often then offer the item back to the Insured providing he/she returns the settlement  made for the loss.

Salvage is most commonly seen with plant and machinery on a Commercial Policy. If a piece of plant is damaged say a digger and Insurers accept there is cover for the claim on the policy they will often use an Assessor to inspect the vehicle. If he deems it uneconomical to repair, Insurers may offer the Insured the value of a replacement (less depreciation,depending on the policy wording). They may also offer the piece of plant to the Insured as salvage or in other words he gets the first opportunity to buy the damaged digger from the Insurance Company. 

It should be remembered that the Insured has no right to abandon the salvaged item as it may be of significant value to the insurance company.

Gerry Carter CDIP LA.