Insurance say car is totaled and wants to take the car after they pay the bank. is that legal?

Technically speaking, there is not much you can do about it.  Once they offer you full value for the vehicle plus the salvage value, they are entitled to take ownership of the vehicle and salvage it.  Your only option would be to keep the vehicle.  But there are some problems with doing that.  First, they will deduct the salvage value of the vehicle from the amount they are offering you, meaning you will get less money for the car from the insurance company.  Second, they will require you to convert the title to a salvage title before releasing the money, meaning the car will not be allowed to be operated on a public roadway until all repairs are made and it is certified repaired by the Ohio Highway Patrol.  This will cost you more money in addition to the repairs, and you will not be able to use the vehicle until all repairs are made and certified, not solving your problem. The only other option I see would be to request that the repairs be made since it is less than what the vehicle is worth.  But they will probably deny the request, as it is their choice whether to repair or total. As to the loan balance, that is an unfortunate situation that I see in my practice quite often.  Check with your daughter's insurance company to see if they provide gap coverage, which will pay the difference between the total loss value and the amount owed on the loan.  Also, check with the bank.  Some banks include gap coverage in the application for financing, so they may have it.  If she has gap coverage through either, then she may not be liable for the deficiency balance between the value of the vehicle and the amount owed on the loan. Tough situation, and I wish I had better advice for you.  Best of luck to you and your daughter.