An insurance company will declare a vehicle a total loss when the cost to repair is very close to its market value.  Depending on the company any vehicle needing around 80 to 90% of the vehicle's value to repair it could be declared a total loss.  By law, it is entirely up to the company. 

The insurance company's job is to get you back to the situation you were in before the loss occurred.  If it is less expensive for them to repair, they will fix your car.

 Why is this important?  In the event of accident, customers should be ready to leave it up to the company from the start.  If you expect your vehicle to be totaled and they decide to repair, you could set yourself up for disappointment. 

On the other hand, if you're surprised by your vehicle's value, they could choose to total rather than repair even if the damage seems rather minor.  For instance, if you have a 1992 Chevy Caprice with 100,000 miles on it, even a minor rear end accident that damages the rear bumper and trunk lid could total the car.  It costs a lot to repair but the book value on the vehicle is quite low.  The company might choose to total this car.

Know your vehicles' values.  One of the best resources for this is Kelley Blue Book.  Look up the "Private Party Retail" value now.  This tells you approximately how much you could sell your vehicle for if you put it for sale in your driveway.  It is generally very close to the amount that the insurance company might offer to total your vehicle.

If your vehicle's value is rather low, you might consider dropping to liability only.  Not only will it save you some premium dollars, but it will also take the decision to total away from the company.  Going back to that 1992 Caprice, wouldn't it be better just to patch up the rear end of that Caprice and keep driving it?  Why let the insurance company total a perfectly and send it to the scrap yard?