Salvage Value
Definition:
The estimated value of damaged property that can be sold or reused after a loss.
Explanation:
Insurers may deduct salvage value from claim payments if the homeowner keeps the damaged property. Otherwise, the insurer may claim the salvage to recover part of the payout.
Example:
If a fire-damaged appliance could be resold for $200, the insurer may reduce the claim payout by that amount if you keep it.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.