SOFA-CFE · Question #60
___________ is the sale of damaged goods, for which the insured has been indemnified by the company.
The correct answer is A. Salvage. Salvage refers to the sale of damaged goods after the insurer has paid out the claim - the insurer takes ownership of the damaged property and sells it to partially recover the payout amount. Why the distractors are wrong: Loss offset (B) is not a standard insurance term; it…
Question
___________ is the sale of damaged goods, for which the insured has been indemnified by the company.
Options
- ASalvage
- BLoss offset
- CReevaluation
- DNone of the above
How the community answered
(44 responses)- A80% (35)
- B2% (1)
- C11% (5)
- D7% (3)
Explanation
Salvage refers to the sale of damaged goods after the insurer has paid out the claim - the insurer takes ownership of the damaged property and sells it to partially recover the payout amount.
Why the distractors are wrong:
- Loss offset (B) is not a standard insurance term; it conflates the concept of recovering losses with a specific mechanism that doesn't describe this process.
- Reevaluation (C) relates to reassessing the value of an asset, not to selling damaged goods post-claim.
Memory tip: Think "salvage" like a salvage yard - a place where damaged goods are sold for whatever value remains. In insurance, the company "salvages" value from what's left after paying you out.
Community Discussion
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