Page 28 - The Insurance Times September 2025

insurancepe: Series

Scavenging Losses

or Salvaging

Safety? Dr K. Rajagopal Reddy

PhD, FIII, FCII (UK), FLMI (US), FT
Chartered Insurance Practitioner
Topspot Insurance Broking Pvt. Ltd.

Insurers' responsibility does not end with prompt and timely claim settlement. In fact, this is where
it begins. For society's benefit as well as their own, the insurers must see the horizons that lay
beyond claims - greatest safety of the greatest number of people.

Salvage in Insurance: How do we learn?
In motor insurance, salvage refers to the material value of Lots of research is made in the world's top universities -
the damaged parts of the vehicle in an accident, approved Oxford and Cambridge that can be summarized in the fol-
by the insurer to be sold in the market. In most accident cases lowing manner:
it happens when the vehicle is damaged beyond repair.
How we Learn?

In marine insurance, salvage is services awarded to a third
party to save maritime property from peril at sea. There
are two types of salvage - Contract Salvage and Pure Sal-
vage. Contract Salvage involves a contract stating fixed
amount of salvage charges before the commencement of
the salvage service. Pure Salvage means that salvage is
undertaken without making any contract or agreement.
Both parties agree to decide the salvage charges at a later
date.

In commercial insurance, salvage means that once a claim Look at the above chart carefully. It summarizes a paper
is settled, the insurer takes ownership and offers it for sale published by one of the world's top universities. It says 90%
to reduce its loss. of what we read is forgotten within 24 hours!!! Everybody
does not teach and man doesn't learn!
In aircraft insurance, salvage means - when the aircraft that
sustains varying degrees of damages and is rendered a to- What is the most wonderful thing you observe in the world?
tal loss by the insurer. The aircraft salvage is offered, as is The famed character of Mahabharat, Yudhishthir or
where is, to the highest bidder. Dharmaraj answered the above question in this manner:

26 September 2025 The Insurance Times