In insurance terminology, what is the term used to refer to the scrap value of property?

The term that refers to the scrap value of property is salvage value. This represents the estimated resale value of an asset at the end of its useful life after the depreciation has been considered. It is important in insurance and accounting as it helps determine the potential recovery amount when the asset is disposed of or damaged beyond repair. In the context of insurance, salvage value can impact claims settlements where the insurance company may consider what can be recovered from a damaged property when assessing losses.

Understanding salvage value is crucial for both insured parties and insurers, as it can influence coverage decisions, premium calculations, and policy conditions. Although market value, residual value, and book value are also relevant financial terms, they refer to different concepts related to property valuation and may not directly equate to the specific context of scrap value. Market value pertains to the estimated selling price of the property in the current market, residual value often relates to the worth of an asset after depreciation over time, and book value refers to the value of an asset as recorded on the company's balance sheet.