After an auto collision loss an insurance company may elect to pay the insured's claim and take possession of the vehicle. What is this practice referred to as?

The practice of an insurance company paying an insured's claim and then taking possession of the vehicle is referred to as salvage. When an insurer takes ownership of a damaged vehicle, it typically does so to recover some of the lost funds by selling the salvaged vehicle or its parts. This process helps the insurer mitigate their losses after fulfilling their obligation to the policyholder.

In the context of auto insurance, salvage refers to the value that remains in a vehicle that has been declared a total loss. The insurer evaluates the condition of the vehicle and may choose to retain it after compensating the insured, as they can sell it to recoup some of the costs associated with the claim.

Subrogation, on the other hand, involves the insurer seeking to recover payments made to the insured from the responsible party or their insurer. A deduction refers to a specific amount subtracted from a claim payout, while warranty pertains to guarantees regarding the quality or condition of a product, which is not relevant in this context. Understanding these terms helps clarify the specific practices in insurance claims management, particularly regarding total loss scenarios.