Legal Definitions - salvage charges

Salvage charges refer to the reasonable and necessary expenses incurred to recover, protect, or preserve property that has been damaged or is at risk of damage, often following an insured event.

These charges are typically associated with efforts to prevent further loss, mitigate damage, or retrieve property that might otherwise be completely lost. In an insurance context, these costs may be covered under a policy as part of the overall claim.

Here are some examples to illustrate:

• Example 1: Marine Accident

  A container ship carrying valuable electronics encounters a severe storm, causing several containers to fall overboard and others to shift dangerously, threatening the ship's stability. A specialized marine salvage company is hired to stabilize the remaining cargo, pump water out of flooded compartments, and tow the damaged vessel to the nearest port for repairs. The fees paid to this salvage company for their equipment, crew, and efforts to secure the ship and its remaining cargo would be considered salvage charges. These costs are incurred to prevent the total loss of the ship and its contents.

• Example 2: Commercial Property Fire

  A retail store experiences a significant fire that damages a portion of its inventory. Although many items are destroyed, some clothing and accessories are only smoke-damaged or water-damaged from the firefighting efforts. The store owner hires a professional restoration company to carefully remove these salvageable items, clean them, dry them, and store them in a climate-controlled environment. The aim is to reduce the overall loss by making these items fit for discounted sale rather than discarding them entirely. The costs for this specialized cleaning, drying, and storage service represent salvage charges, as they are directly related to recovering value from the damaged property.

• Example 3: Vehicle Recovery

  A car veers off a mountain road during icy conditions and slides down a steep embankment, coming to rest precariously close to a river. While the car is heavily damaged, it is not a total write-off, and there's a chance to recover it for repairs. A heavy-duty tow truck equipped with a crane and specialized recovery gear is dispatched to carefully lift the vehicle from the embankment and transport it to a repair facility. The additional fees charged by the towing company for the complex recovery operation, beyond a standard roadside tow, would be classified as salvage charges because they are costs specifically incurred to retrieve the vehicle from a hazardous and difficult-to-access location.