Property or assets that have been damaged, lost, or considered a total loss
When an insured item, such as a vehicle, building, or piece of equipment, is damaged or destroyed due to an insured event (e.g., accident, fire, natural disaster), the insurance company may pay the policyholder for the loss. In return, the insurance company takes possession of the damaged or destroyed property, which is then referred to as "salvage."
Salvage items can vary widely in terms of their condition and value. Some insurance salvage items may be partially damaged but can still be repaired, refurbished, and resold. Others may be severely damaged or non-functional and have little or no value beyond scrap materials.
The insurance company typically attempts to recover a portion of the claim payout by selling salvage items through various means, such as salvage auctions, salvage yards, or private sales. The proceeds from the sale of salvage items help offset the cost of the insurance claim and minimize the financial impact on the insurance company.
Insurance salvage can include various types of property, including:
Vehicles: Salvage vehicles can range from slightly damaged cars that can be repaired and resold to completely totaled vehicles that are only valuable for their parts.
Real Estate: Insurance companies may acquire properties damaged by fire, flood, or other disasters. These properties may be sold as-is or after repairs are made.
Machinery and Equipment: Industrial equipment and machinery damaged in accidents or natural disasters can also be categorized as salvage.
Goods and Inventory: In cases of damage or loss of inventory, insurance companies may take possession of unsellable or damaged goods.
Boats and Watercraft: Damaged boats, yachts, and other watercraft may become insurance salvage.