What is meant by "right of salvage" in property insurance?

The concept of the "right of salvage" in property insurance accurately refers to the insurer's right to take possession of damaged property after a claim is paid. Once the insurer compensates the policyholder for a loss, the insurer retains the ability to recover some value from the damaged property, which is often referred to as "salvage." This process allows the insurer to mitigate their losses by selling the salvaged items or assets, which can help offset the costs incurred from the claim.

The other options do not align with the definition of salvage. The ability to repair damaged property pertains to the insurer's role in restoring the property to a usable state but does not involve taking possession for salvage purposes. The policyholder's decision to sell damaged property does not reflect the insurer's claim or control over salvaged items, as that would imply a different process outside the salvage context. Lastly, the obligation to restore property to its original condition leans more towards the terms of the policy, focusing on restoration rather than the insurer's right to seize and salvage the property. Thus, the concept of the "right of salvage" is properly illustrated by the insurer's right to take possession of damaged property after payment.