What Does A Salvage And Recovery Clause Mean? 
Salvage and recovery relates to subrogation and rights of recovery that an insurance company reserves for themselves after indemnifying you for a loss . The entire concept of salvage , recovery , subrogation , and indemnification fill up text books . Insurance is a contract and in the contract the insurance company has been asked by you , in exchange for mutual understandings and agreements , to provide protection against certain kinds of losses . When your insurance company indemnifies you for your loss , they replace you in position of right in many situations . For example , if your car were damaged beyond repair , the carrier pays to you the value of the car and in doing so , assumes right and title to the salvage value of your car . They sell this salvage to businesses that resell the usable parts and the insurance company uses the money they collect to lower the final dollar cost of paying your loss to you . Recovery usually relates to the right of the carrier to pursue `` recovery '' from the responsible , negligent party who damaged your car . This process is referred to as subrogating and the carrier seeks to recovery from the at-fault and negligent driver -LRB- under tort laws -RRB- all or a portion of the amounts they paid to make you whole after your loss . Another closely related provision in your insurance is the right of `` abandonment '' . Insurance companies do not grant you the right to abandon your property so you can collect a larger reimbursement . This may come up during the settlement of pairs and sets , like ear rings . The insurance company will not let you surrender -LRB- abandon -RRB- to them the other ear ring so you can make the insurance carrier liable for a larger amount so you can buy a new set of ear rings . The obligation of the carrier is to the amount of the the loss even if only a partial loss . That 's why your company will repair a car rather than pay you the full value when there is a partial loss . There are other places where salvage comes up , like in inland and ocean marine , but for the vast bulk of readers the latter answers explain how these terms impact your coverage and how your insurance company will deal with you . 