After a massive accident, a car could be declared totaled or total loss if it is so damaged that it is in a condition beyond repair, the cost of repairing it is more than the actual value of the car or the state laws and regulations deem it to be a totaled car that is not safe enough to drive again. In such a scenario, the car insurance comes into picture.
The insurance company pays the owner of the car if there are no liabilities.
The insurance money goes to the financing company if the car was financed and the loan hasn't been repaid.
In the third scenario when the insurance money exceeds the loan left, the excess goes to the owner of the car.
Before the insurance money can be paid out to whichever party needs to receive it, a claims adjustor first calculates the cash value of the car. After the accident, the car owner is usually required to take out all personal items and give the key of the car to the adjustor who then studies the car to determine its cash value. Cash value of a totaled car generally depends on lot of parameters. The first and the most important parameter is the mileage of the car. If the car is relatively new with fewer kilometers on road, it is implied that it is relatively new and in good condition. This means the cash value of the car would be higher. The opposite is true for a car with more kilometers on road.
Usually it is advisable to keep the receipts of all extra accessories bought for the car. Special seat linings, sound system, speakers etc. all enhance the value of the car provided their cost can be proved to the insurance company. Finally the claims adjustor will come up with a cash value which then goes to the appropriate party, the owner in some cases, or the financing company in other cases if the loan repayment is still outstanding. The car can then be sold by the insurance company to salvage buyers. One can keep the totaled car for whatever reasons by paying out the salvage money to the insurance company. The amount paid by the insurance company also includes the taxes as per the state rules. Since insurance companies always try to reduce the insurance amount, it isn't a bad idea to negotiate a better value than what they are willing to pay for the totaled car.
Generally, if the insurance terms also include rental coverage, one can ask the insurance company for a rented car for a few days until you can manage to get a new vehicle for yourself. Although, this term would be around a week or so, one can always manage to get a few more days out of the insurance company. A totaled car is generally not pleasant for the owner, but having a proper insurance and enough negotiation can ensure one doesn't lose out financially.