I assume the $16,000 you "paid" was to pay off the car loan. That $16,000 is not your casualty loss. You should not be entering anything about pay off.Your casualty loss is the Blue book value less the $10K insurance paid. That's what you need to enter instead.
For FMV, you are asked the FMV before loss: that is where you enter the blue book value. Then it asks FMV after loss: enter 0 there.
