Salvage Rights to House?

The scenario is this. We have a client who was under-insured at the time of loss. The policy limit on the contents portion of the claim was $28,800. The ACV of the contents was $43,000. The insurance company claimed salvage rights and selected which items from the contents list to cover in order to reach the policy limit.

My question is two fold. First, does the insurance company have salvage rights even though the claim is underpaid ($28,800) and the client is not made whole until the ACV of the contents ($43,000) is recovered? Second, if in fact the insurance company is entitled to salvage rights under these conditions, do they have the right to pick and choose which items from the contents they will cover?