As other’s have said, “total loss” doesn’t mean they haul the car to the landfill.
It means it is cheaper to sell the wrecked car at auction than pay to have it repaired.
If you have a car that is worth $10,000 and that has suffered $5,000 worth of damage but that is worth $7,000 at auction in its current state then the insurance company can either:
1. Pay $5000 to fix your car and give it back to you which costs them $5,000
2. Declare the car “totaled” and pay you the $10,000 value of the car and then turn around and sell the wreck at auction for $7,000 which costs them $3,000.
In this scenario it is $2000 cheaper for the insurance company to declare the car totaled than it is for them to repair it. They do hundreds of thousands of these sorts of transactions every year so I’m guessing their data folks have very well refined algorithms that tell them exactly which cars to declare “totaled” and which to repair that maximize their profits long-term. This is how car insurance companies make their money.