Crane with damaged boom
in need of repair.
informational sign struck by a vehicle,
sustaining damage to trailer and sign.
Previously driven dump truck
with damage from engine fire.
Wheel loader which sustained
significant fire damage.
atM machine that was
dropped on one side.
Salvaged modular building
involved in a collision.
tion for their claim adjustment activities when subrogation is an issue.
•;Account for compliance. Include all relevant compliance needs within the internal checklist such as disposal timeframe,
regulatory guidelines and environmental
issues affecting disposal. Ensure proper
handling of any hazardous materials.
•;Seek an experienced partner: It’s easy
to overlook the necessary steps and to
know the various markets for salvage
when going it alone. Working with a
company that has salvage expertise will
improve results. Choose a national or
local provider who offers onsite services to work with adjusters to assist in loss
evaluation, provide service support and
recommend a course of action.
Data to Drive Salvage Results
Setting key measurement points helps to
account for compliance and risk issues, as
well as improve the process and set goals
around salvage projects. A technological-
ly-enabled salvage company can provide
the insurance carrier with actionable data
and strong reporting capabilities, which
can be valuable in measuring claims suc-
cess. It can also be a powerful tool to help
underwriting managers be market com-
petitive. Suggested Key Performance In-
dicators (KPIs) might include:
• Net recovery percentage vs. actual
Once the insurance carrier has set its
KPIs, it can understand its baseline num-
bers in the first year of the program and
then set future goals to form a more stra-
Recovery proceeds from salvage are often
the last task of a claims file. Salvage claims
are frequently not tracked, and may be
miscoded or buried in the claim with
little visibility for future data usage. How-
ever, using a streamlined, data-driven
process helps to improve overall results.
Since salvage is usually meeting a more
rapid timeframe, it tends to be sold locally and significantly below market value.
When salvers are used, they are typically
local and only market to a pool of several
salvage buyers, limiting recovery on the
assets. These vendors also lack expertise in
specific markets and are unable to support
a comprehensive salvage program. Some
best practices to improve recovery include:
•;Tapping;into;an;online,;global;market-place to increase transparency in the
process and enhance the sales value by
leveraging more potential buyers.
•;Utilizing;salvage;vendors;with;compre-hensive onsite services and expertise
in all commercial lines (energy, ocean,
inland and property).
•;Clearly;communicating;salvage;guide-lines to all internal and external sal-vage-related personnel.
•;Avoiding;the;common;practice;of;ne-gotiating or settling salvage with the
•;Investigating;and;offering;possible;res-olutions for brands and label issues.
• Test Control of Damaged Goods
the loss and provide solutions.
Embracing best practices does more
than create a better process; it generates
results that drive value for an insurer’s
Regardless of the salvage situation, it
is important to design a solution to deliver results that contribute to the larger
strategy.;Making;salvage;a;strategic;prior-ity and rolling out a consistent, uniform
process that encourages the development
of specialized solutions for niche salvage
assets, will enhance overall progress and
provide measurable business results.
Gary Mazeffa is a vice president in sales
for the Capital Assets Group at Liquidity
Services, an asset recovery firm with locations in North America, Europe, and Asia.
He has experience in both the personal
and commercial lines of business and in
underwriting, policy and claim handling/
processing. To learn more visit www.