What is the definition of salvage in insurance?

In the context of insurance, the term "salvage" refers specifically to the damaged article that is the subject of a claim. It encompasses the idea that when an insured item is damaged, insurance companies may have a right to recover any residual value from the damaged property after a loss has occurred. This could involve selling the remaining part of the item or its components to recoup some costs associated with the claim.

When a claim is processed, the insurer often evaluates the salvage value to determine how much they can recover from the loss. This is important not only for the insurer's financial considerations but also for the insured, as it may impact the payout amount. Thus, understanding salvage is crucial for anyone involved in insurance claims, as it helps clarify the financial implications of a loss.

The other options do not accurately describe the concept of salvage in insurance. For example, creating new insurance policies does not relate to salvage, nor does retrieving lost items or allocating money for repairs. Since salvage specifically pertains to the damaged goods and their residual value in claims handling, the definition provided aligns perfectly with its established use in the insurance industry.