IF the car is written off a payout will be the current market value of the car or the value you have declared to the insurer.
It will usually be the lower figure as if you have insured a car for 5k that only has a 3k value they will not pay out the 5k as that would be betterment.
Or if you have insured a car for 3K that is worth 5k you will be underinsured so will be a proportional payout.