Flooded car

My husband drove into water and flooded the car. It is a 2002 merc. Sable 54,300 mil. The ins.L adjuster is saying to replace the engine and dry out the interior. My mechanic, who I know a long time said the car is totaled and even with replacing the engine I may have electirical damage down the road! I am very confused the water entered the car and the engine would not turn over, just a click.