The next time your insurer replaces or pays you out for damaged property, don’t dispose of or sell the damaged property until you’ve checked your policy – for it may no longer be yours.

Damaged property that your insurer replaces or for which you successfully claim is known as “salvage” and becomes the property of the insurer. Since the insurer is effectively absorbing the loss, it has rights to damaged property it has covered and can legally sell this property to defray costs.

“If you dispose of the salvage you’re preventing the insurer from exercising that option,” Gari Dombo, the managing director of Alexander Forbes Insurance, says.

Another reason salvaged goods are often required by insurers is to check that your claim is valid and that the cause of damage is covered in your policy. If you dispose of or abandon the damaged property before the insurer has been able to check it you may have your claim rejected, or be required to reimburse your insurer for the salvage, Dombo warns.

“Even after a claim is settled a policyholder remains obligated to assist the insurer conclude a successful recovery,” he says.

Your insurer may agree to allow you to keep the salvage at a negotiated price or may allow you to keep it at no charge.

Dombo says that in the case of motor vehicles, insurers will generally not sell salvage to the man in the street because they are usually contractually obliged to send write-offs to salvage contractors.

The important thing is to make sure you acknowledge that the insurer owns the write-off and show you are prepared to pay for it.

Donald Kau, the head of corporate affairs at Santam, says “the right to salvage is a natural consequence of an indemnity insurance contract”. He says the only time that Santam is not entitled to the salvage is when the insured is under-insured.