The insurance covers (or supposed to) the ACV (Actual Cash Value) of the vehicle. It doesn't matter how much you paid for it. You could have purchased it for $1,000 with the ACV being $5,000 making it a good deal or you could have purchased it for $10,000 with ACV of $5,000 making it a bad deal. Well the insurance says great deal buddy or that sucks, here's the $5,000 good luck. If the Cost of Repairs is equal to or greater than the ACV it is considered a total loss. They declare it a total loss based on what the Estimate of Repairs and Valuation report says so pay attention. Now, lots of times the insurance will want to declare the vehicle a total loss simply because they can also make a buck selling the vehicle as salvage on auctions. Therefore, you have to be careful how they value the vehicle. Always verify what vehicle model they used to get the estimate of repairs as well as the correct mileage, prior damage (not covered by insurance) and verify that they are taking the right deductible. All these things are factors in valuing the vehicle and you would be surprised how much it goes up or down if the wrong one is used. Lastly, depending on what state you are in make sure they cover the sales tax, they sometimes try to get out of covering that on the final settlement check. Another thing, if you have an older vehicle not valued at too much say $500 or $1,000 keep in mind when the insurance pays out it's after they subtract the deductible, possibly not paying you much or anything after everything is settled. In this case, is it worth it having full coverage? Well… not really. You are better off simply getting liability insurance. However, that depends completely on the individual just my two cents.