I was looking for some "out" for you.
The best case would be insurance...that is why you have it. If it will not help, the next in line is the other party. If they are not available? You are in a tough spot.
At the end of the day, you have title to a car with a lien on it. Basically, you own the car but also owe the bank. SO you have to pay the bank off before you can take full possession
of (and sell) the car.
If the car is a total wreck? It puts you in a tough spot.
You owe the bank...that is clear.
with the bank is a contract
. If you do not pay the contract, the bank can take steps to enforce the contract, including repossess the car (take back title) and/or sue you to force you to pay the balance owed on the loan.
Do you have to surrender title? No...not necessarily, not so long as you pay the bank loan. Nothing stops you from taking the car from the storage area, continuing to pay the loan and keeping the car. May not be the best thing to do...but that is an option.
Perhaps the better option is to negotiate with the bank to help them recoup the money you owe on the car.
Example: If you owe $10K on the loan, and the car is worth $4K in parts, you can negotiate with the bank to try and get them to allow you to sell the parts, to help pay down the loan.
Or, better yet, get them to agree to take title to the car and reduce your loan by a certain amount...say you owe $10K, see if they will take title to the car and reduce what you owe to ___ (fill in the blank to whatever you can negotiate). This can help get past this with minimal financial exposure.
At the end of the day, you can walk away...the bank will take title and can sue you for all the money you owe (minus whatever they recover from the salvage).
That is why I would try and negotiate with the bank to reduce that number...work with them to help reduce the final amount you will owe the bank
Let me know if you have more questions...happy to assist if I can