Salvage refers to the process of recovering, repairing, and selling damaged or lost property. In the insurance industry, salvage is the term used for any property that is deemed unrecoverable or too expensive to repair or replace. These could be anything from vehicles, boats, buildings, or other insured assets.

When an insurance claim is filed, the insurance company often takes possession of the damaged property and determines if it can be restored to an acceptable condition or if it must be sold as salvage. If it is deemed salvage, the insurance company can either sell the property as is or have it repaired and then sell it.

The use of salvage in the insurance industry is primarily focused on recouping losses and reducing the overall cost of claims. By selling damaged or lost property that cannot be restored to its original condition, insurance companies can recover some of the money they have paid out in claims. In addition, the sale of salvage can help reduce the overall cost of claims and, as a result, help reduce the cost of insurance premiums for policyholders.

Salvage can be sold through various channels, including auction houses, salvage yards, or directly to buyers. The price for salvage is typically determined by the market value of the property in its current condition. The sale of salvage can also be affected by a number of other factors, including the demand for the type of property being sold, the availability of buyers, and any legal requirements that may apply.

In summary, salvage is a critical component of the insurance industry and plays an important role in helping insurance companies recover losses and reduce the overall cost of claims.