Canadian Accredited Insurance Broker (CAIB) One Practice Exam

The concept of a statutory condition of salvage refers to the obligation placed on the insured to take reasonable steps to protect their property from further damage after a loss has occurred. This condition is essential as it helps mitigate additional losses that can occur following an initial incident—such as a fire, flood, or accident. It emphasizes the importance of acting prudently to prevent further harm, which is not only a responsibility of the insured but also impacts the insurer's ability to assess the claim effectively and helps reduce the overall cost of claims. By requiring the insured to take these protective measures, this condition encourages proactive behavior. For instance, if a property has been damaged but is still salvageable, doing things like boarding up broken windows or moving undamaged items to a safe location can significantly help reduce the extent of loss. This responsibility helps ensure that the insured does not allow preventable damage to occur, ultimately supporting both the insured's interests and the insurer’s need to manage risk.