Salvage value
The residual value of damaged property, deducted from the indemnity or sold to a specialist buyer, a routinely underestimated line of the settlement.
Golden Ray, Brunswick channel, September 8, 2019: the car carrier capsized with 4,161 vehicles aboard, and none was judged resalable after seawater. They were scrapped, salvage value was nil, and the indemnity moved by tens of millions of dollars. Salvage value is what property is still worth after a loss, downgraded lots, repairable machinery, wrecks sold for parts, and it comes off the indemnity: no one collects full value and keeps the goods. In practice the bids of specialist buyers of damaged stock set it, and it remains a point of dispute. Two things take it to zero. A manufacturer that will not, for the sake of its brand, let affected products go back on sale; and liability, since putting an item whose safety is no longer assured back on the market moves the risk without extinguishing it.
When the car carrier Golden Ray capsized in the Brunswick channel on September 8, 2019, none of the 4,161 vehicles aboard was judged saleable: immersed in seawater, they were destroyed rather than returned to the market. Salvage value was therefore nil, which on a loss of that size moves the indemnity by tens of millions of dollars.
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