Property Insurance FundamentalsQuestion 157 of 474
After paying a total loss on an insured automobile, the insurer takes title to the wrecked vehicle and sells it to a salvage yard for $1,500. This is an exercise of the insurer's right of:
a.Coinsurance recovery
b.Subrogation against the insured
c.Pro rata contribution
d.Salvage
Explanation
Salvage is the insurer's right, after paying for a total loss, to take possession of the damaged property and recover whatever value remains. It complements the principle of indemnity: the insured collects the loss but does not also keep the wrecked car and resell it for additional gain.
Law Reference: Standard policy condition; Cal. Ins. Code §2071This topic, taught in full in the Personal Lines Insurance Producer guide. Personal Lines Insurance Producer — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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