if it has been an "insurance total loss " recorded throughg the insurers , then when you do insure this car purchased from a salvage yard as you say ..... you will have to declare this , that it has been an insreance total loss , to any insurers ,,,,
Diesel cars can cope with water damage a lot more than petrol cars. Petrol cars that have been submerged in water are prone to water pump failure and lots of other nasties that do damage to the parts.
Is it fresh water or salt water damage ?...Pond,Lake or sea.
I know that sounds crazy,but my range rover slipped into the sea up to it's seats from on a loading ramp when we were loading my boat into the sea. The salt in sea watar does corrode if it gets in.
Fresh water isn't too bad.
Get it up on the ramp,check all the brakes, and just keep an eye on things in general,
it depends on what CAT it has been put under by the insurers who wrote it off,if its cat A,B,or C then it will have to be VOSA VIC tested,if CAT D then just mot and tax it and drive away,and as for telling your insurers about it,well you wont have to, as they will already know its been written off,as it will be on the register.
And how deep was it in the water (if its possible to find out!)?
If its been in any water, you would need to take out the carpet and ensure its all dried out, there will be absorbent insulating material under the carpet... but still be prepared to put up with a musty smell.... possibly for ever more!
And yes that is if the electronics are not a time bomb waiting to fail (like the early Focus instrument panels, that suffer frequent failures through crap circuit board protection without going any where near a duck pond!).