Salvage

When measuring the exact amount of loss (which indemnity is), it has to be
borne in mind with certain property damage that there will sometimes be
something left of the damaged subject matter of insurance (fire-damaged stock,
the wreck of a vehicle, etc.). These remains are termed ‘salvage’. If the remains
have any financial value, this value has to be taken into account when providing an
indemnity. For example:
(a) The value of the salvage is deducted from the amount otherwise payable to
the insured (who then keeps the salvage); or
(b) The insurer pays in full and disposes of the salvage for its own account.
Note: The term ‘salvage’ in maritime law has a very different meaning, where it
usually refers to acts or activities undertaken to save a vessel or other
maritime property from perils of the sea, pirates or enemies, for which a
sum of money called ‘salvage award’ (or just ‘salvage’) is payable by the
property owners to the salvor provided that the operation has been
successful. The term is sometimes also used to describe property which has
been salved.