by 
The Curious Bag
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An insurance company takes a number of factors into account when deciding whether or not to "total" a car. Having one's car totaled can either be a profitable or enraging experience for the owner, depending on the situation and vehicle.
Totaling
A car is considered a total loss by an insurance company if the cost to repair and salvage value exceed the cost of a replacement.
Frame Damage
Almost any car will be considered a total loss if it suffers a bending or twisting of the frame. This is especially true on unibody cars.
Engine Damage
Most insurance companies will opt to completely replace an entire engine if it has sustained enough damage. However, if the vehicle is old and has an expensive engine, it may be totaled.
Exotics
Insurance companies have been known to write off only lightly damaged exotic cars that use a lot of carbon fiber. This is largely due to the fact that carbon fiber is difficult and expensive to replace or repair.
Unsafe Conditions
If a vehicle is damaged in such a way that it may pose a future risk to the insurer (even if repaired), it may be written off as a total loss.
Source:
NPR: Autos Weather Katrina, End Up for Sale
Marketplace: Katrina's Wrecks Now Bolivia's Headache
Resource:
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