You may be able to keep the flood damaged car depending upon state laws however you would need to pay the insurance company salvage value for the vehicle and thus buy it back from them at the end of the claim settlement.

If you owe less or the same as the actual cash value (ACV) of your vehicle then your Comprehensive coverage settlement amount for the water damaged vehicle should cover your loan note. But if you owe more than the value of your car, are up-side down on the vehicle as it is termed, than your insurance settlement for your claim would not pay off the whole loan amount you still have financed, insurance will only pay up to the value of your car in the condition it was in before the water damage due to the flooding situation. If you owe more than your car is worth than you may end up still paying on it after the insurance claim is settled since the ACV amount was not enough to pay off your loan balance.

Now if your insurance does pay off your note, or if you have Comprehensive to pay ACV and Gap insurance that would than pay the "gap" amount which is the balance of the loan after your primary insurance pays ACV, than you will be able to not have to pay on your car that has been totaled out.

To buy back a vehicle one must pay the insurance company salvage value for it, which is basically the amount they would receive for the car if they sold it in auction or to a junkyard, whichever method your insurer typically uses for cars that are totaled out. You cannot just keep the vehicle since as part of the settlement. You are normally required to sign over the title to the insurance company as part of settlement process so they take possession of the vehicle and sell it for salvage.

An insurance company will sell a car for salvage in order to recoup some of the monies they paid out in the claim for the total loss. In some states cars of a certain age or that have had certain damages to them cannot be bought back by the policyholder because of laws in place.

For example according to the Illinois Department of Insurance one cannot normally keep a vehicle after it has been declared a total loss. The Illinois Vehicle Code does not permit you the right to retain the salvage once the insurance company has deemed your automobile a total loss. The state does so in an effort to minimize automobile "chop shop" crime.

There are two instances though in which IL law does allow a vehicle owner to retain their vehicle after it being totaled:

1. if the vehicle has incurred only hail damage that does not affect the operational safety of the vehicle, or
2. if the vehicle is nine (9) model years of age or older.

If your state does allow vehicles that have been totaled out to be bought back by individuals (and then given either a salvage or rebuilt title) then it would next be up to the guidelines of an insurance company whether they would sell you back the car. Since your vehicle would be termed a "flood car" and many states have a branded title. Most states treat flood vehicle events with either a Flood or Salvage brand or a combination of the both (salvage certificate with flood branded on it).

So your car would have a branded title, which would make it hard to ever sell in the future and also would make it difficult to insure. Most insurance companies do not want to place full coverage on a vehicle with a branded title so it is harder to find insurance for this type of car.

If your state and insurance company do allow you to keep the car (buy it back) and you want try to have it repaired, you may first want to have a mechanic thoroughly inspect it for you since cars with water damage are fraught with damages big and small. Flood waters can cause damage to a vehicle's computer and electrical systems, as well as potentially causing anti-lock braking and airbag systems to malfunction. Transmissions can later act up do to previous water damage and mold can grow in the interior as well. Flood cars are infamous for having hidden problems that appear later.

If you decide to buy another car once your flood damaged vehicle is paid off, you can get affordable car insurance quotes here.