What typically happens to salvage after a water damage claim is settled under a shop insurance policy?

When a water damage claim is settled under a shop insurance policy, salvage is typically considered to be the property of the insurer. This means that once a claim is paid, the insurance company has the right to take possession of any salvageable items or materials that resulted from the insured loss. This allows the insurer to recover some of the costs associated with the claim by selling the salvaged items. Retaining the salvage helps insurers mitigate their financial losses resulting from claims payouts.

In contrast, other options might suggest different outcomes that do not align with standard insurance practices. For instance, the idea that salvage is retained by the insured does not reflect the legal principle that the insurer holds the rights to salvage to offset their loss on claims. Similarly, notions that salvage proceeds are credited as a return premium or that the proceeds are passed to the insured would not occur since the insurer typically retains control over any potential financial recovery through salvage. This principle maintains fairness and aligns with the contractual obligations within insurance agreements.