When we did our salvage emphasis article in November 2005, we heard via phone and e-mail from a number of adjusters who wanted us to address the issue of proper and ethical disposal of salvage. Although our article concentrated on the inherent value of steel salvage, respondents pointed out that there is a plethora of other salvage that companies deal with on a regular basis. And that's where the trouble begins.
Many carriers have instituted policies for "ethical disposal" of all salvage as a result of questionable practices in the past. In the good old days it was not uncommon to conduct in-house auctions of salvage for insurance company employees. What about that slightly smoke-damaged curio cabinet? Or that repairable stereo receiver?
Ah, but over time, a lot of smaller salvage items never made it to auction. "Why haul it to the office for auction when I can just drive it right over to my house? And besides, we adjusters deserve a little 'perk' for all the abuse heaped upon us." From this illogical reasoning, virtual theft rings were born. There's no way to skirt the issue. No, it is not OK to take that smoke-damaged wrench from an insured's burned-out garage and hang it in your own workshop. Of course you can clean it off, and we know you don't have one that size to begin with. But it's still stealing!
The reason some people don't see it that way is because they only believe what they want to believe. And when they want to believe differently, they will, regardless of the unethical overtones. That's why ethical multi-million dollar companies have taken notice and have started to care about those $20 wrenches, slightly smoke-damaged curio cabinets, and soot-laden small appliances.
The answer to this problem resulted in the institution of strict new policies that forbid not only the in-house auctioning of salvage, but also the transport of even the smallest salvage items in insurance-company cars or adjusters' personal vehicles. All salvage is strictly off limits and must be placed into the hands of reputable independent auction vendors. As Martha Stewart might say, "This is a good thing!"
Has the problem been solved? No, this type of situation is never really solved. It is "dealt with," "monitored," "policed," whatever you want to call it. Reputable insurance companies are doing what they can to instill and install ethical best practices, and they should be lauded. Those who turn a blind eye should be ashamed. What category does your company fall into?
More often than not, the only way to promote ethical behavior is to minimize the temptation through the elimination of opportunity. The bottom line? It comes down to the individual, and the ultimate solution is … your conscience.
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