Here's the deal. No one, not even the insurance company, can make you sell your car. But, the insurance company has a responsibility to the lienholder (your bank, finance company, etc.). The finance company gets up to the amount you owe before you see a dime.

Example: Say your '03 Mustang is worth $10,000 (I'm just using round numbers, don't freek out ). If you owe $7500, the lienholder gets the first $7500 and you get $2500. Simple, right?

Let's say you owe $12,000. You get nothing. Zero. Why? The insurance company doesn't owe to pay off the car, just it's value. The insurance company can't control what kind of deal you made to get into that car. Some lease car policies include gap insurance, but I haven't seen this on a regular policy.

What makes a total loss? A car that has more than 80% in damage compared to the value of the car (this perceptage can vary by insurance company such as 70% or 75%). So if the car is worth $10,000, the car is a total loss at $8000. A car can be a 'constructive' total loss if a good portion of the damage may be hidden. If an estimate equals 65% of the ACV (actual cash value), but it hasn't been torn down yet (think tow yard), the adjuster may consider the car a total loss if there is the likelyhood that there would be more than $1500 in damage.

OK, now we now what a total loss is. How are claims paid? The policy says (and I've never seen one that didn't) that the insurance company owes to repair the car, or pay out the value of the car, whichever is less. The value is usually figured out by a third party company based on the condition of the car, mileage, model, etc. Based on the information supplied by the company, this third party company will send back a report that suggests what that car is worth (in our example, $10,000).

So now we know the car is a total loss, and we now the value of the car. Is this it? No. If the insurance company keeps the car, they are buying it from you. Because you'll need to get another car, and that includes paying sales tax, your offer would be $10,000 plus 6% sales tax (and this will vary by county). The total you will receive is $10,600.

What if you want to keep the car? Well, right off the top, you lose the sales tax because the insurance company is no longer buying the car. As the hulk sits, it still has value. To offset their losses, insurance companies run their salvage vehicles through an auction. Because they will not get the chance to recoupe a portion of their loss, they deduct the salvage value of the car. This amount can vary on the loss depending on how the car was damaged. A car that was rear ended will have more value bacause the salvage yards bidding will get quite a bit for the front clip, engine, etc. Usually the doors can be worth some good money, and on we go. A car hit hard in the front will bring less money because the clip is no longer intact, and if hard enough, there may be questions on the engine condition.

For our purposes, lets say the salvage value of your Mustang is $1500. The insurance company takes this from the $10,000. So now you are getting $8500. And if you owe that $7500, you are now down to $1000. From this amount, if you have a deductible, this is now subtracted. If it's $500, you are now down to $500 for a settlement with a car you can't drive and no money to repair it.

If you keep this total loss, the state my now get involved, via the insurance company. I believe the State of Florida requires the insurance company submit the title to be converted to a salvage title. So now, even if the car was repaired to it's preaccident condition, the retail value of that car has now been cut 50% because of the salvage title. So say you 'invested' the $8000 to repair the '03 Mustang, the value of the car will be $5000.

If you have already signed the title over to Geico, you are out of luck. They don't have to sell the car back to you. Which gets us back to the top. They can't force you to sell your car to them. But it will greatly effect the amount of the net settlement. Good luck.