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its better to be declared totalled so that insurance will replace your car.
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Not neccessarily. If there is a gap between your loan and what the insurance covers then you are screwed. If your loan balance for the car is $18,000 and your insurance only pays you $15,000 you are responsible for the $3,000 difference. On the other hand, if you keep the car and the damage greatly affects your resale value then you are still screwed.
That's why it's important to get gaap insurance. It's rare that you make the choice of "totalling" your car, that's usually up to the insurance company.
