Damaged Property Salvage
Salvage Dealing with Damaged Inventory After a Loss
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Whose Salvage is This Anyway?
After a loss occurs it is the insured's decision whether or not to surrender their damaged property to the insurance company for salvage. Likewise, an insured cannot force their insurance company to take the salvage. The insurance company will only take damaged goods for salvage if it will reduce their total loss payout. Regardless of whether the insured chooses to retain their damaged goods or turn it over to the insurance company as salvage, the value established for the damaged goods will be applied in the claim adjustment.
The insured may know their market for the liquidation of salvageable goods better than the insurance company's salvor. An example would be a fire-damaged commercial sewing machine. A salvor may have several buyers for such damaged items and may be able to sell the machine for $10,000 to be used as spare parts. Thus at that moment the agreed salvage value of the sewing machine is $10,000 less handling charges and sales commissions.
However, the insured may consider the damaged machine as valuable spare parts as well and estimate the value of such to be more than the $10,000 as offered by the salvage dealer. In this case the insured could choose to retain the damaged sewing machine. The insurance claim payment would then be reduced by the $10,000 agreed salvage value as projected by the insurance company.
After a loss occurs it is the insured's decision whether or not to surrender their damaged property to the insurance company for salvage. Likewise, an insured cannot force their insurance company to take the salvage. The insurance company will only take damaged goods for salvage if it will reduce their total loss payout. Regardless of whether the insured chooses to retain their damaged goods or turn it over to the insurance company as salvage, the value established for the damaged goods will be applied in the claim adjustment.
The insured may know their market for the liquidation of salvageable goods better than the insurance company's salvor. An example would be a fire-damaged commercial sewing machine. A salvor may have several buyers for such damaged items and may be able to sell the machine for $10,000 to be used as spare parts. Thus at that moment the agreed salvage value of the sewing machine is $10,000 less handling charges and sales commissions.
However, the insured may consider the damaged machine as valuable spare parts as well and estimate the value of such to be more than the $10,000 as offered by the salvage dealer. In this case the insured could choose to retain the damaged sewing machine. The insurance claim payment would then be reduced by the $10,000 agreed salvage value as projected by the insurance company.
