Recovery
Salvage Report Template & Example
Last updated 2026-08-03
Salvage is a small caption with two ways of going wrong, and only one of them is about money. The first is engaging a vendor before permission is on the file, which turns a recovery into an expense and occasionally into a complaint from an insured who did not know his belongings were leaving the house. The second is disposing of something that another part of the file needed intact.
That second failure is the one worth building a document around. On any loss with a recovery theory, the failed component is evidence before it is scrap, and the two roles are decided by different people on different timescales. The salvage report is where that conflict either gets resolved in writing or gets resolved by whoever arrives with a truck first.
The worked example below is the no-salvage case: the Harbour Lane water loss produced nothing worth selling, and the example writes out why, item by item, including the one component that is being retained for a reason that has nothing to do with its value. That is the more useful lesson. A no-salvage entry that shows what was examined is a closed question; a blank caption is an open one that surfaces at audit.
Jurisdiction
Written primarily against US first-party property practice. Claim handling is regulated state by state — acknowledgment and response deadlines, prompt-payment requirements, adjuster licensing and unfair claims practices standards all differ — and the policy actually issued governs the claim. Where a page cites a statute, model act or regulation, confirm what applies in the state where the loss occurred. Outside the US, treat the structure as transferable and the legal references as not.
Salvage Report template
Free Word download, no email required. Or open it in Professional Drafter — it lands in your template library, ready to draft against.
When to use this document
- Any loss where damaged property is being removed, replaced or written off, which includes total-loss contents, not only structures.
- Before any salvage vendor is contacted, not after. The permission and the engagement belong in the same document, in that order.
- Whenever a component is being retained for a subrogation or expert examination, so that the retention is recorded somewhere the disposal decision will be read.
Worked example
Fictional scenario: the Harbour Lane water loss, where nothing recovered has resale value. The example is the nil return written properly, and it leaves one item open — the water heater still in service at the risk, which may be wanted for a recovery examination and is under nobody's hold.
Claim identification
- Insured:
- D. Okonjo, 118 Harbour Lane. Single-family dwelling, owner-occupied.
- Date of loss:
- reported 14 July 2026, discovered approximately 07:15. Peril: water, non-weather.
- Adjuster:
- R. Calloway. Examiner: C. Mendez. Report prepared 3 August 2026.
Claim PC-2026-11482. Policy HO-4471903, term 1 March 2026 to 1 March 2027.
Property considered falls under dwelling coverage and unscheduled personal property.
Property considered for salvage
1. Stored books, 14 cartons. Location at loss: floor of the hallway closet. Now: retained by the insured in the garage, boxed. Condition at inspection on 18 July: water-stained to varying heights, several cartons with pages fused at the block, all showing surface mould growth on examination. Residual value: nil.
2. Drywall, base trim and closet shelving, 31 linear feet of affected wall run. Removed by the insured's mitigation contractor. Condition: cut to 24 inches above slab and disposed of as construction debris on 21 July. Residual value: nil, and none is available in this material.
3. Braided stainless supply line and crimped fitting, one assembly. Removed by the adjuster at inspection on 18 July, tagged PC-11482-A. Condition: separated at the fitting, otherwise intact. Residual value: nil as scrap. See the evidence hold below, which is the reason it is on this list at all.
4. Water heater, one unit, installed August 2025. Location: utility closet, still connected and in service. Condition: undamaged by the loss and functioning. Not claimed, not replaced, no salvage arises. Listed because a question sits over it, recorded under the evidence hold.
5. Contents on the closet racking, six inches above slab. Dry, undamaged, not part of the claim. Listed for completeness so it is clear what was examined.
Valuation basis
Items 1 to 3 were valued by inspection rather than by a vendor indication, and I judge that the cost of collection and handling would exceed anything recoverable on any of them.
On the books specifically: a salvage vendor indication was not sought. Water-damaged general-interest paperbacks and book-club hardbacks with visible mould are not a market anyone collects, and I would have been asking a vendor to attend, sort and cart fourteen cartons for a return I would expect to be nil before their charges. I record that as a judgement rather than a quotation so that a reviewer knows exactly what stands behind it. No first editions, signed copies or technical sets were present; I went through the cartons individually and photographed them, images 30 to 44.
On the drywall and trim: construction debris of this kind has no salvage market. No basis is offered because none exists.
On the supply line assembly: scrap stainless in this quantity is worth nothing, and its value to the file is evidential.
Permission and authorization
No salvage vendor has been engaged, so no expense authorization was sought from the examiner. Recorded so it is clear that the sequence was not reversed: nothing was instructed and then reported.
The insured's position on the books was taken at inspection on 18 July and confirmed by telephone on 22 July. He was asked to retain the cartons pending disposition and has agreed; he has moved them to the garage. He has not asked to keep them and has no objection to disposal once the contents element is priced and settled. Nothing has left the premises.
The books have not been paid for. No payment has issued on contents. That matters here because the standard fire policy wording enacted by statute in several states reads "There can be no abandonment to this Company of any property." I have not treated the cartons as ours to dispose of on the strength of a written-off valuation. His agreement is recorded rather than assumed.
Vendor engaged
None engaged, and none is recommended.
The only items with any theoretical market were the books, and my judgement recorded above is that a vendor attendance would cost more than it returned. If the examiner takes a different view I would want that instruction in writing before contacting anyone, since the attendance charge is incurred whether or not the vendor takes the goods.
Evidence hold
Item 3, the braided stainless supply line and crimped fitting, tag PC-11482-A, is under hold. Placed by R. Calloway on 18 July 2026 and logged into the branch evidence locker on 20 July. Reason: it is the component whose failure caused the loss and it supports the referral made to the recovery unit on 20 July against the contractor who replaced the water heater in August 2025. Release date: open-ended. It must not be disposed of, cleaned, dismantled or bench-examined without the recovery unit's instruction, and my recommendation there is that notice to the adverse party precede any examination.
Item 4, the water heater, is NOT under hold, and that is the open point on this report. It is undamaged and still in service, so no salvage question arises and on the face of it nothing needs deciding. But if the recovery unit wants it examined — the connection at the heater end is the same connection that failed — then it needs to be secured before the insured replaces or services the unit, and at present nobody has asked him not to. He has no reason to keep us informed about a heater that works.
This is flagged to the recovery unit and to the examiner and is unresolved as at the date of this report. It is recorded here rather than only in the referral because the salvage report is where the disposal decision gets read, and an item nobody has claimed is an item somebody eventually throws out.
Disposition and proceeds
- Item 1, books:
- held by the insured, undisposed, pending pricing and settlement of the contents element. No proceeds.
- Item 2, drywall and trim:
- disposed of as construction debris by the mitigation contractor on 21 July. No proceeds. No allowance arises.
- Item 3, supply line assembly:
- retained in the branch evidence locker under hold. No proceeds and none anticipated.
- Item 4, water heater:
- retained by the insured, in service, not part of the claim. No proceeds and no allowance.
Gross proceeds: nil. Vendor charges: nil. Net proceeds: nil.
Application to the claim
No proceeds are applied and none are anticipated. The outstanding indemnity reserve of $19,000 is unaffected by salvage; the expense reserve of $2,500 carries no vendor charge on this head.
If the contents element is settled and the insured then asks to keep the cartons, an allowance would need to be discussed at that point and this report amended. On these items I would expect that allowance to be nil, but the conversation belongs on the file either way.
Closing entry
There is no salvage of value on this claim. Five categories of property were examined and itemized above. Three have no residual value. The water heater and the racked contents are undamaged and form no part of the claim. No vendor has been engaged, no expense has been incurred, and no proceeds are anticipated.
Two items remain open. The fourteen cartons of books are held by the insured pending pricing and settlement of the contents element, target 20 August, owner R. Calloway. The water heater at the risk is not under hold and may be wanted for a recovery examination; a decision is requested from the recovery unit by 14 August, after which it will either be secured in writing with the insured or released.
Prepared by R. Calloway, 3 August 2026.
Section-by-section guide
What each section is for, what a good one contains, and where they typically go wrong.
1.Claim identification
The identifiers, the coverage the property sits under, and the adjuster and examiner. Salvage entries get read out of file context, by an accounts team applying proceeds, by an auditor sampling recoveries — so the header carries the claim number and the coverage without which the entry cannot be posted.
2.Property considered for salvage
List what you looked at, not only what has value. This is the section that makes a nil return defensible: an itemized list with a condition and a disposition against each shows a reviewer that the question was worked rather than waved away. Quantities and locations, in the same order as the scope, so the two documents can be read side by side.
3.Valuation basis
How the value was arrived at: a vendor's indication, an observed market for the item, or a judgement that the cost of removal and handling exceeds anything recoverable. Say which. "No value" reached by looking at an item is a different entry from "no value" reached because a vendor declined it, and the second is stronger.
4.Permission and authorization
Secure permission before employing any salvage vendor, and record it here: who authorized it, on what date, by what method. Two permissions can be in play — the examiner's authority to incur the expense, and the insured's agreement to property leaving the premises where the property has not yet been paid for. Record whichever apply. Note also that the standard fire policy enacted by statute in several states says, in terms, "There can be no abandonment to this Company of any property." That is why the insured's position on property not yet paid for is a live question rather than a formality. What the form on your file says may differ; read it.
5.Vendor engaged
Name, contact, the date instructed, what they were instructed to remove, and the basis of their charges. If no vendor has been engaged, say that and say why. A vendor not engaged because nothing warranted one is an answer; a vendor not engaged because nobody got round to it is a gap.
6.Evidence hold
Anything that must not be disposed of, and why. On a file with a recovery theory this section outranks the rest of the document: a component retained for examination is evidence, and a salvage instruction that sweeps it up destroys the recovery. Identify the item by its tag, name the person who placed the hold, and give the date it can be released or say that it is open-ended.
7.Disposition and proceeds
What happened to each item: sold, scrapped, retained by the insured, held. Where proceeds were received, the gross figure, the vendor's charges, the net, and the date. Where the insured retains an item that has been paid for, record the allowance so the settlement reconciles without anyone reconstructing it later.
8.Application to the claim
Where the net proceeds are applied and what effect they have on the reserve. Keep this to arithmetic that can be traced. Recoveries that arrive after a file is closed cause more reconciliation work than they are worth, so state the expected timing as well as the amount.
9.Closing entry
One paragraph a reviewer can read alone: the position on salvage for this claim, and nothing outstanding, or what is outstanding, with an owner and a date. On a nil return, this is the paragraph that gets quoted, so write it as a conclusion supported by the list above rather than as an assertion.
Common mistakes
The failure modes that show up most often when this document is reviewed later.
Instructing a salvage vendor before the authorization is recorded.
The attendance charge is incurred on the phone call, not on the sale. If the goods turn out to be worthless the file carries an expense that returned nothing and that nobody authorized, and it is the kind of entry an audit sample stops on.
Letting a salvage instruction sweep up a component held for a recovery examination.
It is the one loss on the file that cannot be undone. The recovery goes with the part, and no amount of photography substitutes for a fitting an expert can put on a bench.
Writing "no salvage" with nothing behind it.
It is indistinguishable from not having looked. An itemized list with a condition and a disposition against each takes five minutes and converts an assertion into a closed question, which is what a reviewer needs.
Removing property that has not yet been paid for without the insured's agreement.
The standard fire policy enacted by statute in several states says "There can be no abandonment to this Company of any property", so the assumption that a written-off item automatically becomes the insurer's is not one that wording supports on its face. Whatever the position under the form on your file, a complaint about belongings removed without agreement is expensive out of all proportion to the salvage.
Recording gross proceeds and omitting the vendor's charges.
The net is what reaches the claim. A gross figure posted as a recovery overstates it, and the correction lands with an accounts team who cannot see why the numbers differ.
Closing the file with proceeds still expected.
A recovery arriving on a closed file costs more in reconciliation than it usually returns. Either wait for it or record the expected amount and date so that the reopening is anticipated rather than a surprise.
Questions
- What goes in the salvage caption when there is nothing to salvage?
- The items you examined, the condition of each, and the disposition, then the conclusion. The worked example above is exactly this case. A nil return that lists five categories of property and says what happened to each is a finding. "No salvage" on its own is a sentence that a reviewer cannot distinguish from an omission.
- Does the insured have to hand over damaged property once the claim is paid?
- That depends on the form on your file and on the practice in your state, and it is not a question to answer from a template. What is public and quotable is the standard fire policy wording enacted by statute in several states, which provides that "There can be no abandonment to this Company of any property." Read your form, and where property has not yet been paid for, get the insured's agreement before anything is removed.
- Should the failed component go to salvage or stay as evidence?
- Evidence, until the recovery unit releases it. The two decisions run on different clocks. Salvage disposal is often driven by a contractor's schedule and can happen within days, while a recovery examination may be weeks away. Put the tag number and the hold in the salvage report itself, because that is the document the person making the disposal decision is reading.
- Is there a standard that says salvage has to be documented?
- Nothing specific to salvage. The general standard is the claim-file specification in Model 910 §6 — a file maintained so as to show clearly the inception, handling and disposition of each claim, and clear enough that events and their dates can be reconstructed. Adequate claim-file documentation is also among the claims standards market conduct examiners apply. A salvage entry with no basis behind it fails on the reconstruction limb.
The blank template
Exactly what is in the Word download, so you can see the structure before deciding whether you want it.
Claim identification
Property considered for salvage
- Item and quantity
- Where it was and where it is now
- Condition observed at inspection
- Residual value identified, or nil and why
Valuation basis
Permission and authorization
Vendor engaged
Evidence hold
Disposition and proceeds
Application to the claim
Closing entry
Download this template
Free Word download, no email required. Or open it in Professional Drafter — it lands in your template library, ready to draft against.
Sources
Related templates
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Captioned Report Template & Example (Adjuster Report Format)
The captioned report in its twelve standard captions, with a complete filled-in example and a section-by-section guide. Free Word download, no signup.
This page is a documentation aid, not legal advice and not a coverage opinion. Claim-handling requirements vary by state and by policy wording, and a template cannot tell you what your file requires. The worked example describes a fictional loss.