Texas All Lines Adjuster Practice Test

What is defined as damaged property with cash value that can be kept by the policyholder?

1. Depreciation

2. Loss adjustment

3. Salvage

4. Restoration

The correct answer is: Salvage

The definition given in the question aligns perfectly with the concept of salvage. In insurance terms, salvage refers to damaged property that retains some cash value, allowing the policyholder to keep it even after a loss is claimed. Salvage can often be sold or used, which may help offset the loss for the policyholder. This provision acknowledges that while property may be damaged, it may still hold enough value to benefit the owner in some way. In this context, depreciation refers to the decrease in an asset's value over time, which does not directly imply ownership or retaining value after a loss. Loss adjustment is related to the process of determining the amount of loss and is not about what the policyholder keeps. Restoration involves repairing or restoring property to its pre-loss condition, which again does not pertain to retaining damaged property with value. Thus, salvage is the correct choice, as it directly addresses the concept of retaining property with cash value post-damage.