What does salvage value refer to in property insurance?

Salvage value refers to the amount for which property can be sold at the end of its useful life, which is precisely what makes option B the correct choice. In the context of property insurance, salvage value is important because it helps determine the potential recovery amount after a loss occurs. If a property is damaged beyond repair, the insurance claim may consider its salvage value, as this reflects what can be recovered from the discarded or damaged property.

Understanding salvage value is crucial for both insurers and insureds since it affects the determination of total loss and the settlement process. It can influence how premiums are assessed and how claims are calculated, as the salvage value represents the remaining worth of the asset post-use. This concept is particularly relevant when assessing the economics of a total loss versus a partial loss in insurance scenarios.

The other options reflect different aspects of property value but do not capture the essence of salvage value as appropriately as option B.