When the insured receives payment of an adjusted claim, the property that is damaged becomes the property of the insurance company. Often that damaged property is of little value. However, particularly in the case of an automobile, the car may be salvaged and the insurance company may realize part or all of the adjusted claim payment.
The term comes primarily from ocean marine insurance. Often a ship will have a fire in the hold. An adjuster will fly out to the ship while it is underway, evaluate the loss and the insurance company may adjust the claim before the ship even reaches port. That portion of the property that has been declared as loss becomes the property of the insurance company.
There are companies that specialize in salvaged property. This is most commonly seen in the cases of ships but could apply to other forms of recovery.
While I am not sure of the legal interpretation, this clause might extend to the insurance company the right to claim any gain that an insured might have on property that was declared as a total loss, and then sold to a salvage company.