Scavenging Losses or Salvaging Safety?

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.

- Dr K. Rajagopal Reddy PhD, FIII, FCII (UK), FLMI (US), FT Chartered Insurance Practitioner Topspot Insurance Broking Pvt. Ltd.

Salvage in Insurance:

In motor insurance, salvage refers to the material value of the damaged parts of the vehicle in an accident, approved by the insurer to be sold in the market. In most accident cases it happens when the vehicle is damaged beyond repair.

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 Salvage. 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 is settled, the insurer takes ownership and offers it for sale to reduce its loss.

In aircraft insurance, salvage means - when the aircraft that sustains varying degrees of damages and is rendered a total loss by the insurer. The aircraft salvage is offered, as is where is, to the highest bidder.

How do we learn?

Lots of research is made in the world's top universities - Oxford and Cambridge that can be summarized in the following manner:

Look at the above chart carefully. It summarizes a paper published by one of the world's top universities. It says 90% of what we read is forgotten within 24 hours!!! Everybody does not teach and man doesn't learn!